South Dakota property-tax changes are in effect, but household relief will vary

South Dakota’s 2026 property-tax changes took effect July 1, 2026, but they do not create one uniform reduction for every property owner or every tax bill.

The package combines two different laws. Senate Bill 245 provides a statewide component through the general education formula and a homeowner property tax reduction fund. Senate Bill 96 gives counties the option to impose a local gross-receipts tax of up to 0.5% and use the revenue for credits against the county portion of property taxes.

The practical effect for a household will depend on the county, the property’s classification and assessed value, the taxing jurisdictions on the bill and whether the county adopts SB 96.

SB 245 is the statewide component

SB 245 creates a homeowner property tax reduction fund administered by the South Dakota Department of Revenue. The legislation directs the statewide measure toward owner-occupied single-family dwellings and education-related property-tax relief.

This part applies statewide. It operates through the state’s education-related funding structure and the homeowner reduction fund; it is not a direct cash payment to homeowners.

South Dakota property taxes support school systems, counties, municipalities and other local government units. The Department of Revenue explains that property-tax calculations account for the levies needed by all taxing jurisdictions that can tax a property.

SB 96 depends on county action

SB 96 authorizes a county to adopt an ordinance imposing a local gross-receipts tax of up to 0.5% on covered tangible personal property, electronically transferred products and services.

Revenue from the optional tax must go into a county property-tax-reduction fund. The first priority is a credit against the county portion of property taxes on owner-occupied properties. If those county taxes are fully offset, remaining revenue must be used proportionally to reduce agricultural and non-agricultural property taxes.

County participation is not automatic. County commissioners must adopt the required ordinance and complete the notice and implementation steps. The law gives counties a choice rather than requiring every county to impose the tax.

Early county responses show why residents should not assume the same result statewide. Dakota News Now reported in July that Meade County had adopted the measure, while first readings had occurred in Pennington and Codington counties. The report also said other counties were discussing the option. Those reports describe local actions and discussions, not statewide adoption.

Why the savings will differ

A property-tax bill combines levies from several taxing jurisdictions. SB 96 addresses the county portion, while SB 245 works through statewide education-related formulas and the homeowner reduction fund.

Two homeowners with similarly valued properties could therefore see different outcomes if they live in different counties, have different taxing jurisdictions on their bills or own property with a different classification.

Owner-occupied residential property is the most direct initial beneficiary of the county option. Agricultural and other non-agricultural property may receive proportional reductions only after county owner-occupied taxes are fully offset.

Residents also should not assume that a county’s adoption will immediately reduce the next bill. The timing depends on the ordinance’s effective date, the county’s collection period and the state’s implementation procedures.

Deadlines and what to watch

The Department of Revenue has published implementation materials describing county notice and effective-date procedures. The agency’s current county-commissioner page links to a tax guide for the measure, but the specific April 2026 PDF supplied for this review returned a 404 when retrieved. Residents should confirm the current guide and timeline with the Department of Revenue or their county before relying on a particular billing date.

July reporting said counties adopting the measure in time could begin producing relief as early as the 2027 pay year. The approved research brief also identifies January 1 and July 1 implementation dates and 2028 tax-bill itemization as points to monitor, but those details should be checked against the current official guide before publication of a time-sensitive county notice.

For now, property owners should:

• Check county commission agendas, ordinances and public notices for SB 96 action.
• Ask the county auditor or treasurer whether an ordinance has been adopted and when the tax would begin.
• Confirm the property’s owner-occupied status and classification with the county director of equalization.
• Review future tax bills for a separate owner-occupied credit line if the county adopts SB 96.
• Avoid relying on a statewide dollar estimate without checking the property, county and taxing jurisdictions involved.

The laws are in effect, but the practical answer for any household remains local: SB 245 is statewide, while SB 96 depends on county decisions and the timing of those decisions.

Sources

• South Dakota Department of Revenue: County Gross Receipts Tax
• South Dakota governor's July 1 announcement
• Dakota News Now: SD counties can use optional half-cent sales tax to reduce homeowner property taxes

Look for updates to this story

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