The South Dakota House on Monday rejected an attempt to scale back Senate Bill 245, then passed the property tax measure after a Republican-on-Republican debate that ran more than an hour.

Why it matters

SB 245 creates a homeowner property tax reduction fund for owner-occupied single-family dwellings. The bill directs a $55.9 million one-time transfer into that fund on July 1, 2026, then dedicates revenue starting Aug. 1, 2027, from the state sales tax rate returning from 4.2% to 4.5%. The House fight centered on whether lawmakers should send all of that returning revenue into property tax relief or hold some back for future budget needs.

Amendment fight splits Republicans

House members voted 31-38 against Amendment 245H, then passed SB 245 on a 42-27 vote. Because the House rejected the amendment and passed the Senate bill unchanged, the measure now goes to Gov. Larry Rhoden.

The first fight came over Amendment 245H, offered by Rep. Mike Weisgram, R-Fort Pierre.

On the House floor, supporters and opponents framed the amendment in simple terms. Weisgram said it would apply only the first $60 million of the returning sales tax revenue to the new fund, instead of the roughly $110 million expected from the full 0.3 percentage-point rate change. The amendment text also would have reduced the one-time transfer, though that was not the main focus of the floor debate.

Supporters of the amendment said the House could still deliver real property tax relief without committing every dollar of the returning revenue.

Rep. Taylor Rehfeldt, R-Sioux Falls, backed the amendment and said lawmakers had to think beyond the current political pressure. 

“We can’t only function today on what feels good today because this is the biggest topic,” Rehfeldt said. “We have to function in a way that thinks about the future and not just on feeling.”

Rep. Will Mortenson, R-Fort Pierre, made a similar case. He said the amendment would still make property tax relief a priority while leaving room for other state obligations. 

“The question I think in this amendment is, is property tax reduction a priority or is it the only priority?” Mortenson said.

Backers say homeowners have waited long enough

Opponents of the amendment argued that the House finally had a chance to deliver noticeable relief and should not water it down.

Speaker Jon Hansen, R-Dell Rapids, opened debate on the bill and said homeowners across the state have been pleading for help. 

“If we don’t do something significant for them, there are people in the state that are going to be forced out of their homes,” Hansen said.

Rep. Tim Goodwin, R-Rapid City, also opposed the amendment, saying he was focused on average homeowners, not high-end examples raised during the debate. 

“I’m not looking at the guy that lives on the hill in Sioux Falls,” Goodwin said. “I’m looking about the little guy.”

The amendment failed on a 31-38 vote.

Bill passes without changes

After the amendment failed, the House returned to the bill itself. More members spoke against tying up future revenue, while supporters said the state could meet its other obligations and still send meaningful relief to owner-occupied homeowners.

The bill then passed 42-27.

SB245 had been amended in the House. That means the Senate will need to concur or the chambers will have to appoint conference committees.