House panel to review recreational marijuana tax structure

A House panel will hear a bill that establishes a tax structure for recreational marijuana sales.

The structure will only go into effect if voters approve of recreational marijuana at the polls in November.

This question on the ballot is not yet official. Petitions to put it on the ballot are still circulating ahead of the May 3 deadline.

In 2020, voters approved a constitutional amendment legalizing recreational marijuana, but it was struck down by the courts.

The bill taxes marijuana at 15%.

Jeremiah Murphy is a lobbyist for the Cannabis Industry Association of South Dakota. He says the city where the sale takes place gets 5% and the counties 8.5%.

“These go back to the counties where they are collected. They are to be used for restricted purposes – either to fund state attorneys, sheriffs or indigent defense and activities in counties where counties are responsible for all of this,” Murphy says. “Finally, 1.5% goes to the state. That 1.5% will be more than enough to fund the state’s regulatory requirements under this bill.

The House Taxation Committee meets on Tuesday to hear the bill.

A Senate bill establishing a recreational marijuana program has not been scheduled for a hearing.

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