Legislature passes phone taxes


Susan Smith, Cns

PIERRE (CNS) – The South Dakota Legislature has passed two bills to level the playing field for the state’s telecommunications companies.

Senate Bill 63 places a 4 percent sales tax on all long distance calls that originate or terminate in the state from a billing address in South Dakota. House Bill 1104 puts a four percent gross receipts tax on wireless phone service.

It’s time for South Dakota to take a serious look at the way it taxes telecommunications services, House Majority Leader Bill Peterson, R-Sioux Falls, said. Currently cell phones aren’t subject to the gross receipts tax.

It was estimated the bill would generate about $2 million. Public Utilities Commissioner Bob Sahr said it would increase individual phone bills based on how many long-distance calls customers make.

It is estimated that House Bill 1104 could bring in about $5 million. Individual phone bills would increase four percent above current monthly charges, Sahr said. Sixty percent of the new revenue would go to the state’s property tax reduction fund with 40 percent going to the counties.

The House passed Senate Bill 63 47-18. The Senate passed House Bill 1104 24-11.