Is that a special session lurking in the background?

I'm kind of surprised no one except South Dakota political columnist Bob Mercer is catching the important news on the insurance company tax case that's starting in court next week. From his story (which you won't find on the Internet):
Companies with a principal office or regional home office are allowed to reduce their state insurance taxes up to 70%.

They are charged only half of their normal amount of their insurance taxes and also are allowed to deduct the costs for their local real estate taxes.

The case will focus on whether South Dakota's system is unconstitutional.
What does that mean in hard dollars? Try a considerable portion of a $60 million income source for the state. Granted, it's not at the level of video lottery, but it's still a very sizable portion of revenues for the state. As Bob notes, it's the 4th largest revenue source for the state of South Dakota.

So what happens if we'd lose most of our 4th largest revenue source?

I'm not sure, but I'd bet a special session would potentially be considered to address the shortfall.

So, could we lose one of our largest revenue sources? I don't know. But be nervous about this one. Be very nervous. It's that important.

Comments

Anonymous said…
Relax, the court would probably just order the SD based conmpanies to pay the same rate as the out of state ones.
Anonymous said…
Feel foolish here but, could you please explain this a little more as i did not follow this one at all.
Thanks
PP said…
Met life thinks they (and all other out of state insurers) should be taxed the same as SD domiciled companies.

Plus met life wants a refund for everything they've paid over that amount since the 1970's.

It's going to cut into the SD budget by tens of millions in revenues that won't be collected (and possibly might have to be refunded)
Anonymous said…
OUCH.......
Let's hope we keep as is. Thanks for the input. See what happens when a voter doesn't keep up on things.
People I sure hope you learned my lesson here!!!!!!!!
It pays to stay connected and INVOLVED.

PPThanks again
Anonymous said…
8:00 pm is correct--Sounds like all that need be done is remove the overly favorable treatment of insurers based here. Probably some deal pushed through by the chamber. Get rid of it. Let them pay their fair share. Just like everyone else.
PP said…
10:45 - you're off the mark.

Think - How many jobs do the domiciled companies provide here? How much do they pay in property taxes?

It was done this way in an attempt to stimulate economic development. If they're domiciled here, they provide as much (or more) in economic stimulus than they would ever pay in taxes.

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