South Dakota House Bill HB1197

South Dakota 2023 Regular Session

• Introduced: 2/1/23
• Refer: 2/1/23
• Refer: 2/7/23

Caption

Exempt funeral and burial services from the state gross receipts tax.

Impact

The enactment of HB 1197 would directly impact the fiscal landscape for funerals and burials within the state. By removing the gross receipts tax for these services, the bill intends to alleviate financial burdens on families during what is often a difficult time. Stakeholders in the funeral industry argue that this measure could foster more equitable financial conditions for service providers and facilitate access to necessary funeral services for the public. As a result, it may indirectly promote local businesses and support families as they navigate the costly expenses associated with funerals.

Summary

House Bill 1197 aims to exempt funeral and burial services from the state gross receipts tax in South Dakota. This legislation, introduced by Representative Reimer, proposes an amendment to chapter 10-45 of the state tax code, specifically creating a new section that explicitly exempts the gross receipts derived from burial and funeral services. However, it notes that this exemption does not extend to the gross receipts from the sale of tangible personal property related to these services. This distinction implies that while service fees would be tax-exempt, merchandise associated with funeral services could still be subject to tax.

Contention

While the bill garnered support, there may be contention surrounding the implications of the exemption on state revenue. Critics might posit that exempting funeral and burial services from gross receipts tax could lead to a decrease in expected state revenue, particularly in a budget context where all sources of funding are scrutinized. Additionally, there could be discussions about fairness in tax policy; some may argue that exempting one category of services while leaving other business taxes unchanged might create imbalances, prompting broader discussions on tax equity across various industries.