Contact Us

Potential Reduction in Contractor’s Excise Tax From State Legislature

FILE: Construction, Tractor, Bulldozer
Clipart

South Dakota as a rule is a state where most citizens have an aversion to taxes. One exception to that notion is the Contractor’s Excise Tax.

The South Dakota Department of Revenue explains the fee like this: The contractors’ excise tax is a 2% tax imposed upon the gross receipts of contractors who are engaged in construction services or realty improvements in South Dakota. The contractors’ excise tax and the contractors’ sales and use taxes are part of the contractor’s total bill and are collectible from all entities, both public and private. State law allows contractors to list their tax expense as a separate line item on all contracts and bills.  The contractors’ excise tax is a gross receipts tax. Contractors may use a bid factor to recover the contractors’ excise tax due on their total gross receipts.

This particular tax is rare among governmental entities, but it reaps about $90 million for the state per year. State Representative Don Haggar says repeal of the tax is out of the question, but a reduction is feasible. “When I look at our business climate in South Dakota, the one black mark is that contractor excise tax. It’s a barrier to entrance because in some cases for a new business they can say, “We can build it cheaper in Worthington or Rock Rapids.’ Even if we just slightly decrease that Contractor’s Excise Tax, I think that sends a message that (South Dakota) wants your business.”

Haggar suggests a .25 percent reduction in the excise tax equating to about $5-6 million that the state would lose on the revenue side. However, Haggar is sure that the economic benefit for the state would offset the lost taxes.

SD LEGISLATURE TO DEBATE DOMESTIC VIOLENCE LAWS

More Local News

More State, US & World News

Best of the Web

Leave a Comment

It appears that you already have an account created within our VIP network of sites on . To keep your points and personal information safe, we need to verify that it's really you. To activate your account, please confirm your password. When you have confirmed your password, you will be able to log in through Facebook on both sites.

Forgot your password?

*Please note that your points, prizes and activities will not be shared between programs within our VIP network.

It appears that you already have an account on this site associated with . To connect your existing account with your Facebook account, just click on the account activation button below. You will maintain your existing profile and VIP program points. After you do this, you will be able to always log in to http://ksoo.com using your Facebook account.

*Please note that your points, prizes and activities will not be shared between programs within our VIP network.

Please fill out the information below to help us provide you a better experience.

Register on KSOO-AM 1140 - Live, Local and Breaking News from Sioux Falls, South Dakota quickly by logging in with your Facebook account. It's just as secure, and no password to remember!

Not a Member? Sign Up Here

Register on KSOO-AM 1140 - Live, Local and Breaking News from Sioux Falls, South Dakota quickly by logging in with your Facebook account. It's just as secure, and no password to remember!