Simplified: Lincoln County Commissioners on Tuesday night voted 3-2 on a half-cent sales tax increase. The extra money from the tax will then be used to lower property taxes on owner-occupied homes in the county. Here's what you need to know.
Why it matters
- Lincoln County is one of about a half-dozen counties in the state to take advantage of a new state law allowing counties discretion to raise sales tax as a way to lower property taxes.
- The law, previously known as Senate Bill 96, was one of a few measures in the 2026 legislative session aimed at reducing property taxes in the state by redirecting that tax burden to people buying goods and services within the county.
- County Commissioners discussed the possibility of referring the measure to a public vote, but ultimately agreed they couldn't under the way the law is currently written. That said, multiple commissioners expressed a desire to see this vote referred to a public vote – something that could be accomplished if enough Lincoln County residents sign a referendum petition.
"If it means we have to carry papers and get signatures, I would like to see all the people vote on this critical issue," Commissioner Jim Schmidt said Tuesday night.
Tell me more about the new sales tax
The proposal itself – passed by a one-vote margin Tuesday night – would add a half-cent sales tax to all purchases made within the county.
- That could bring an estimated $13 million in additional revenue, Schmidt said.
Commissioner Joel Arends voted against the tax increase, not because it's not a good idea, he said, but because he wants to see it go to a public vote.
- Arends said he believes Gov. Larry Rhoden's intent in proposing the legislation was to see all increases go to a public vote – something Schmidt, in a rare move amid the commission, agreed with Arends on.
As for the proposal itself, Arends said it'd be a good thing for homeowners, who he added will ultimately see more money in their pockets as a result.
"You would have to expend an incredible amount of personal spending in order to even equate into the savings that you’ll achieve as a homeowner," Arends said.
How would a public vote work?
First, the commission's decision to approve the sales tax increase would have to be referred to a public vote.
- That requires a referendum petition, which, per state law, needs to collect signatures from 5% of registered voters within the county.
- According to the most recent data available from the South Dakota Secretary of State, there are 50,810 registered voters in Lincoln County.
- That means just over 2,500 signatures would be required to refer the tax increase to a public vote.
Those signatures must be submitted within 20 days after Tuesday's meeting minutes are published in the local paper of record. As of Tuesday night, it was unclear the exact deadline based on those requirements.
If the needed signatures are collected and verified, the tax increase would then be put on the November ballot and, if passed by voters, could take affect no sooner than July 1, 2027.
What happens next?
Anyone interested in referring the tax increase to a public vote should contact the Lincoln County Auditor's office at (605) 764-2581.
If no referendum occurs, the sales tax increase is set to take effect Jan. 1, 2027, and the commission will decide the timing on how exactly the property tax reductions will occur.
