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ARTICLE XI

REVENUE AND FINANCE

1.      Annual tax.
2.      Classification of property for taxation--Income.
3.      Corporate tax power of state not suspended.
4.      Banks and bankers taxed.
5.      Public property exempt from taxation--Exceptions.
6.      Property exempt from taxation--Personal property.
7.      Other exemption laws void.
8.      Object of tax to be stated--Use of vehicle and fuel taxes.
9.      Taxes paid into treasury--Appropriations required for expenditure.
10.      Special assessments for local improvements--Taxes for municipal purposes.
11.      Unauthorized use of public money as felony.
12.      Annual statement of receipts and expenditures.
13.      Vote required to increase certain tax rates or valuations.
14.      Vote required to impose or increase taxes.
15.      Inheritance tax prohibited.


     § 1.   Annual tax. The Legislature shall provide for an annual tax, sufficient to defray the estimated ordinary expenses of the state for each year, not to exceed in any one year two mills on each dollar of the assessed valuation of all taxable property in the state, to be ascertained by the last assessment made for state and county purposes.
     And whenever it shall appear that such ordinary expenses shall exceed the income of the state for such year, the Legislature shall provide for levying a tax for the ensuing year, sufficient, with other sources of income, to pay the deficiency of the preceding year, together with the estimated expenses of such ensuing year. And for the purpose of paying the public debt, the Legislature shall provide for levying a tax annually, sufficient to pay the annual interest and the principal of such debt within ten years from the final passage of the law creating the debt; provided, that the annual tax for the payment of the interest and principal of the public debt shall not exceed in any one year two mills on each dollar of the assessed valuation of all taxable property in the state, as ascertained by the last assessment made for the state and county purposes.
     Provided, that for the purpose of establishing, installing, maintaining and operating a hard fiber twine and cordage plant at the state penitentiary at Sioux Falls, South Dakota, the Legislature shall provide for a tax for the year 1907 of not to exceed one and one-half mills on each dollar of the assessed valuation of all taxable property in the state, as ascertained by the last assessment made for state and county purposes.

History: Amendment proposed by SL 1905, ch 71, approved Nov., 1906.


     § 2.   Classification of property for taxation--Income. To the end that the burden of taxation may be equitable upon all property, and in order that no property which is made subject to taxation shall escape, the Legislature is empowered to divide all property including moneys and credits as well as physical property into classes and to determine what class or classes of property shall be subject to taxation and what property, if any, shall not be subject to taxation. Taxes shall be uniform on all property of the same class, and shall be levied and collected for public purposes only. Taxes may be imposed upon any and all property including privileges, franchises and licenses to do business in the state. Gross earnings and net incomes may be considered in taxing any and all property, and the valuation of property for taxation purposes shall never exceed the actual value thereof. The Legislature is empowered to impose taxes upon incomes and occupations, and taxes upon incomes may be graduated and progressive and reasonable exemptions may be provided.

History: Amendment proposed by SL 1911, ch 265, approved Nov., 1912; amendment proposed by SL 1917, ch 161, approved Nov., 1918; amendment proposed by SL 1953, ch 308, rejected Nov., 1954.


     § 3.   Corporate tax power of state not suspended. The power to tax corporations and corporate property shall not be surrendered or suspended by any contract or grant to which the state shall be a party.


     § 4.   Banks and bankers taxed. The Legislature shall provide for taxing all moneys, credits, investments in bonds, stocks, joint stock companies, or otherwise; and also for taxing the notes and bills discounted or purchased, moneys loaned and all other property, effects or dues of every description, of all banks and of all bankers, so that all property employed in banking shall always be subject to a taxation equal to that imposed on the property of individuals.


     § 5.   Public property exempt from taxation--Exceptions. The property of the United States and of the state, county and municipal corporations, both real and personal, shall be exempt from taxation, provided, however, that all state owned lands acquired under the provisions of the rural credit act may be taxed by the local taxing districts for county, township and school purposes, and all state owned lands, known as public shooting areas, acquired under the provisions of § 25.0106 SDC 1939 and acts amendatory thereto, may be taxed by the local taxing districts for county, township and school purposes in such manner as the Legislature may provide.

History: Amendment proposed by SL 1929, ch 86, approved Nov., 1930; amendment proposed by SL 1947, ch 253, approved Nov., 1948.


     § 6.   Property exempt from taxation--Personal property. The Legislature shall, by general law, exempt from taxation, property used exclusively for agricultural and horticultural societies, for school, religious, cemetery and charitable purposes, property acquired and used exclusively for public highway purposes, and personal property to any amount not exceeding in value two hundred dollars for each individual liable to taxation.

History: Amendment proposed by SL 1957, ch 301, approved Nov., 1958.


     § 7.   Other exemption laws void. All laws exempting property from taxation other than that enumerated in §§ 5 and 6 of this article, shall be void.


     § 8.   Object of tax to be stated--Use of vehicle and fuel taxes. No tax shall be levied except in pursuance of a law, which shall distinctly state the object of the same, to which the tax only shall be applied, and the proceeds from the imposition of any license, registration fee, or other charge with respect to the operation of any motor vehicle upon any public highways in this state and the proceeds from the imposition of any excise tax on gasoline or other liquid motor fuel except costs of administration and except the tax imposed upon gasoline or other liquid motor fuel not used to propel a motor vehicle over or upon public highways of this state shall be used exclusively for the maintenance, construction and supervision of highways and bridges of this state.

History: Amendment proposed by SL 1939, ch 230, approved Nov., 1940.


     § 9.   Taxes paid into treasury--Appropriations required for expenditure. All taxes levied and collected for state purposes shall be paid into the state treasury. No indebtedness shall be incurred or money expended by the state, and no warrant shall be drawn upon the state treasurer except in pursuance of an appropriation for the specific purpose first made. The Legislature shall provide by suitable enactment for carrying this section into effect.

Amendment proposed by SL 1984, ch 1, rejected Nov. 6, 1984.


     § 10.   Special assessments for local improvements--Taxes for municipal purposes. The Legislature may vest the corporate authority of cities, towns and villages, with power to make local improvements by special taxation of contiguous property or otherwise. For all corporate purposes, all municipal corporations may be vested with authority to assess and collect taxes; but such tax shall be uniform in respect to persons and property within the jurisdiction of the body levying the same.

History: Amendment proposed by SL 1921, ch 148, rejected Nov., 1922.


     § 11.   Unauthorized use of public money as felony. The making of profit, directly or indirectly, out of state, county, city, town or school district money, or using the same for any purpose not authorized by law, shall be deemed a felony and shall be punished as provided by law.


     § 12.   Annual statement of receipts and expenditures. An accurate statement of the receipts and expenditures of the public moneys shall be published annually, in such manner as the Legislature may provide.


     § 13.   Vote required to increase certain tax rates or valuations. The rate of taxation imposed by the state of South Dakota on personal or corporate income or on sales or services, or the allowable levies or the percentage basis for determining valuation as fixed by law for purposes of taxation on real or personal property, shall not be increased unless by consent of the people by exercise of their right of initiative or by two-thirds vote of all the members elect of each branch of the Legislature.

History: Section proposed by SL 1977, ch 2, approved Nov. 7, 1978.


     § 14.   Vote required to impose or increase taxes. The rate of taxation imposed by the State of South Dakota in regard to any tax may not be increased and no new tax may be imposed by the State of South Dakota unless by consent of the people by exercise of their right of initiative or by two-thirds vote of all the members elect of each branch of the Legislature.

History: Section proposed by SL 1996, ch 2, §§ 1 and 2, approved Nov. 5, 1996.


     § 15.   Inheritance tax prohibited. No tax may be levied on any inheritance, and the Legislature may not enact any law imposing such a tax. The effective date of this section is July 1, 2001.

History: Section proposed by initiated measure, approved Nov. 7, 2000.


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