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Taxation Committee. This term, I have been entrusted with the responsibility of serving as the chairman of House Tax. I kidded a couple people that for 8 years I was on the "spending committee" and now I'm on the committee that helps decide how much (or how little) we will be taxing you for the "spenders" to distribute. It is a responsibility I don't take lightly, as we all have strong feelings about government spending and tax burdens placed on the backs of South Dakotans.
• Last week in Tax Committee, we heard HB 1090. This bill seeks to clarify that coaches of "certain amateur sports" are not subject to sales tax for the service they provide. Specifically, the bill's prime sponsor had learned that the SD Dept. of Revenue notified the American Legion Baseball coaches in her community that they owed the state tax on the income they had earned. Moreover, they said VFW Baseball coaches and any others who were not direct employees (who receive a W2 form) from a city or organization for whom they work are "contract employees" who must remit taxes to the state for any income they receive. In testimony, it was pointed out that these "contract employees" are responsible to pay 15.3% of their earnings to the federal government for both their share and the employer share of social security, as well as other standard withholdings. The sponsor of the bill pointed out that if the state collects so-called sales/use tax from these employees, the combined tax burden would exceed 21.3% in most cases. She said it didn't seem right that these people who are doing a community service should be subject to an even higher rate of taxation than they would be if they were paid as direct employees, rather than contract employees. I inquired the representatives of the department whether t-ball/little league coaches would be subject to this higher tax rate, and they said those coaches would be considered to be coaching an amateur sport, and if those people received a 1099 form, they would have to remit sales/use tax to the state for their services. Back in 2005, the Legislature first took up this issue when we learned that the Dept. was seeking to collect taxes from VFW Teener and American Legion umpires. We passed a bill exempting them and all other referees of "amateur" sports. Governor Rounds vetoed that bill, but the Legislature saw fit to override the veto. The Taxation Committee passed the bill to the floor, 12-3, and the floor subsequently passed it, 53-17, with nobody speaking against the bill on the floor. Many of you know that I have coached for a number of years. In some cases, I have been a city or school employee, and in other cases, merely a guy who said "Yes" when asked to coach for an organization. It has never struck me that the standard changed based on the contractual agreement. If this bill fails somewhere along the way, it appears I, along with many others, will have to 1) write a check to the state, and 2) change the terms of our employment in the future!

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