South Dakota Governor Larry Rhoden signed two bills aimed at cutting property taxes into law on Thursday morning.
The first bill allows counties the option to replace sales tax with property taxes for homeowners. The second bill creates a homeowner property tax fund and allows money made from the sales tax to be transferred into the reserve.
During Wednesday's legislative session, the Senate passed SB245 to permanently allocate 0.3 percent of state sales tax to pay for property tax reduction.
If the counties replace the sales tax, it will increase from 4.2 percent to 4.5 percent in June 2027.
According to the bill on July 1st, 2026, the state treasurer will make a one-time transfer of about $55 million from the general revenue replacement fund to the homeowner property tax reduction fund.
Other bills waiting for signatures include allowing school boards to require certain students to receive instruction in different settings and a bill changing the definition of abortion.
