By Associated Press - Monday, December 3, 2018

PIERRE, S.D. (AP) - South Dakota tax collections are largely on track as outgoing Gov. Dennis Daugaard prepares to outline his final budget proposal.

The retiring Republican will present the budget plan Tuesday to the Legislature. The proposal will be a blueprint for GOP Gov.-elect Kristi Noem, who will formulate her own budget to be discussed during the upcoming 2019 legislative session.

Noem in January will take over for Daugaard, who has served since 2011. Daugaard told The Associated Press last month that state revenue projections for the next budget year starting July 1 will be relatively strong. Lawmakers will revise the current year’s budget and shape the next one during the session that begins in January.

“Revenue is pretty much on track,” Daugaard said. “I’m glad that on the year that we’re handing off the government, the … annual finances are in good shape.”

While some revenue sources aren’t performing as expected, overall ongoing state collections for the first four months of the current budget year are about $3 million, or 0.5 percent, higher than lawmakers previously anticipated. That includes roughly $3.9 million in higher-than-expected sales taxes receipts, which is the state’s main revenue source.

Daugaard said it’s still too speculative to judge the effect internet sales will have on state tax collections. The state on Nov. 1 started requiring many out-of-state online retailers to collect South Dakota sales taxes under legislation approved earlier this year.

It came after a U.S. Supreme Court ruling in South Dakota’s favor opened the door for consumers to see sales tax on more online purchases from out-of-state companies. Some retailers had been voluntarily remitting the taxes.

“It’s going to be very speculative until we’ve got about a year’s worth of history,” said Daugaard, whose Tuesday speech in the House chamber will include his budget proposal and a farewell address.

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