South Dakota Governor Proposes Property Tax Overhaul

Rhoden says his plan would replace county portion of property taxes with sales tax increase.

Published on Feb. 17, 2026

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South Dakota Governor Larry Rhoden is unveiling a proposal to reduce property taxes in the state. Speaking at a town hall event in Sioux Falls, Rhoden said his plan would replace the county portion of property taxes with a half-cent increase in the state sales tax. Rhoden argues that high property taxes are only a problem in about five counties, and that previous solutions have misidentified the issue as a statewide problem.

Why it matters

Property taxes have been a contentious political issue in South Dakota, with residents in some counties facing high rates. Rhoden's proposal aims to provide relief, though critics may argue that a sales tax hike could disproportionately impact lower-income residents.

The details

Under Rhoden's plan, the county portion of property taxes would be eliminated and replaced with a 0.5% increase in the state sales tax. The governor argues this would provide more equitable tax relief across the state, rather than just benefiting the handful of counties with the highest property tax burdens.

  • Rhoden discussed the plan during a town hall event on February 16, 2026 in Sioux Falls.

The players

Governor Larry Rhoden

The current governor of South Dakota who is proposing a property tax overhaul plan.

Americans for Prosperity

A conservative political advocacy group that hosted the town hall event where Rhoden discussed his property tax proposal.

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What they’re saying

“Many of the other solutions that have been proposed misidentify the problem as a state-wide issue instead of a county issue.”

— Governor Larry Rhoden (dakotanewsnetwork.com)

What’s next

Rhoden is expected to formally introduce his property tax reform bill in the state legislature in the coming weeks.

The takeaway

Governor Rhoden's proposal aims to provide more targeted property tax relief, but the sales tax increase could face pushback from those concerned about its impact on lower-income residents.