South Dakota · November 6, 2026
Two South Dakota counties reject trading a sales tax for lower property taxes
Brown and Codington county voters said no to half-cent county sales taxes meant to cut homeowners' bills. A statewide sales tax increase is still planned for relief.
Voters in two South Dakota counties have rejected a deal that would have raised their sales tax in order to lower homeowners’ property taxes. On Tuesday, about 56% of voters in Brown County and about 60% in Codington County voted against new half-percent county sales taxes that their county commissions had proposed.
The plans were part of a wider push in South Dakota to shift some of the cost of local government away from property tax. Four counties put the question on the November ballot. The idea was simple: a small extra sales tax paid by everyone who shops in the county, including visitors, would let the county cut the property tax rate it charges homeowners.
Opponents argued that a new tax is still a new tax, and that the trade made little sense for many households. One critic compared it to asking someone to hand over $50 to pay part of your property tax bill.
A statewide version is still coming
Even with the local plans voted down, homeowners across South Dakota are in line for some relief. State lawmakers and the governor agreed to raise the state sales tax rate from 4.2% to 4.5% next year and use the extra money to lower property taxes for homeowners statewide.
South Dakota has no state income tax, so it leans on sales and property tax to fund schools and local government. That makes the balance between the two a constant political fight.
What South Dakota homeowners pay
Census survey figures for 2020 to 2024 put the typical South Dakota bill at $2,724 a year, about 1.06% of a median home worth $257,400. That is above the national typical rate of about 0.94% and ranks in the top 20 states.
In Brown County, home to Aberdeen, the typical bill is $2,598 on a home worth $221,100, an effective rate of about 1.18%. In Codington County, home to Watertown, the typical bill is $2,308 on a home worth $237,700, a rate of about 0.97%. Minnehaha County, which includes Sioux Falls, has a typical bill of $3,281 and a rate near 1.14%.
Why swaps are a hard sell
Sales tax and property tax fall on different people. Property tax is paid by owners of homes, farmland and businesses, and indirectly by renters. Sales tax is paid by every shopper, including people who live elsewhere. For a homeowner who spends a lot in town, the extra sales tax can cancel out much of the property tax cut. For a retiree who owns a valuable home but spends little, the swap can look better.
That mix is why results vary from county to county, and why voters often reject swaps even when they dislike their property tax bills.
Common questions
Which counties voted on the sales tax? Brown and Codington counties rejected it. Four South Dakota counties had the question on the November ballot.
Is South Dakota raising its state sales tax? Yes. The state rate is set to rise from 4.2% to 4.5% next year, with the money going to homeowner property tax relief.
What is the typical property tax in South Dakota? About $2,724 a year on a median home, an effective rate near 1.06%.
Does South Dakota have an income tax? No. It relies mainly on sales and property tax.
