How the Tax Cuts and Jobs Act is Helping South Dakota

Below is a continuously updated list of good news arising from the Tax Cuts and Jobs Act enacted by President Trump and congressional Republicans in 2017, and which now must be made permanent.

The average annual TCJA tax cut for South Dakota households is $1,455. 

ACCORDING TO OFFICIAL IRS DATA, TCJA PROVIDED:

20% tax cut for South Dakota households making between $25k – $50k.

19% tax cut for South Dakota households making between $50k – $75k.

68,150 South Dakota households are benefiting from the TCJA’s doubling of the child tax credit.

342,900 South Dakota households are benefiting from the TCJA’s doubling of the standard deduction, which provides tax relief and simplifies kitchen table tax preparation. Thanks to the tax cuts, nine out of ten households nationwide now take the standard deduction.

11,190 South Dakota households are benefiting from the TCJA’s elimination of the Obamacare individual mandate tax. Most households hit with this tax made less than $50,000 per year.

South Dakota employers cite the tax cuts as a driver of employee pay raises, bonuses, and business expansion:

Buche Foods (24 locations statewide) – New store openings and new job creation; new technology and operations investment:

“For a long time, Buche didn’t have many stores — until President Donald Trump signed the 2017 Tax Cuts and Jobs Act.

After the tax cuts were passed, they opened 17 new locations — a more than 300% growth in less than 10 years.

The tax cuts were a key factor in why Buche Foods is serving dozens of remote or rural communities overlooked by bigger grocery corporations.

How did the tax cuts help?

The 2017 tax cuts allowed Buche Foods to reinvest more money in its business and acquire the technology it needs to expand its operations across the country.

For any business, some extra money is always good news, but for Buche, it was critical.

There are fewer clients in underserved regions, making it difficult for businesses to turn over their inventory.

Buche stores need better refrigeration to increase the shelf life of products like meat and dairy. If products last longer on the shelves, they last longer in customers’ fridges.

As you can imagine, better refrigeration comes at a hefty price. But thanks to the 2017 Trump tax cuts — especially the 100% expensing provision — Buche was able to upgrade their refrigeration equipment, making it easier to serve areas that are too small or too remote for big grocery chains to reach.

Today, Buche Foods feeds over 100,000 people in 121 communities, including all nine Native American reservations in South Dakota — and the Trump tax cuts were key for this expansion.” — Protect Prosperity article excerpt

AaLadin Industries, Inc. (Elk Point, South Dakota) – Employee pay raises; increased capital expenditures; employee bonuses:

This 38 year old family owned manufacturer of high pressure cleaning equipment (AaLadin Cleaning Systems), accessories for the cleaning industry (Steel Eagle Inc.), and hunting and towing products (Rugged Gear, LLC) is giving its 80 plus employees bonuses ranging from $250 to $1000 based on time served at the company.  They are also going to be implementing a new starting wage policy effective March 1, 2018.  They are planning on spending somewhere between 1 and 2 million dollars on new equipment to enhance their 125,000 square foot facility.  Thank you President Trump for your vision for the future! – Jan. 31, 2018 statement of CEO/COB Patrick Wingen

Great Western Bancorp, Inc. (Headquarters in Sioux Falls and 35+ branch locations in South Dakota) – Employee pay raises and employee benefit enhancements; doubling of grants to community investment program

Great Western Bancorp, Inc. the parent company of Great Western Bank (www.greatwesternbank.com), announced investments today in its employees and community reinvestment as a result of the tax reform package. The investments include:

• Raising the minimum wage to $15;
• A special one-time $500 bonus or wage increase for nearly 70% of its workforce;
• Enhancements to employees’ health care offerings effective for the 2018 enrollment period; and
• The doubling of its annual contribution to its Making Life Great Grants community reinvestment program.

“We want to kick off 2018 by investing in our people and communities,” said Ken Karels, Chairman, President and CEO of Great Western Bancorp, Inc.“We are proud of our people and their commitment to our mission to Make Life Great. We felt it was important to reward their hard work and dedication with this special bonus, the minimum wage hike and the health care enhancements.”

In addition to making investments in its people, Karels said the Company is planning to double its annual contribution to its hallmark community reinvestment program – Making Life Great Grants.

“The doubling of our commitment to our Making Life Great Grants program reflects a long-term expansion in our ability to invest in and revitalize our communities for years to come,” Karels continued. Giving back to the communities where we work and live is part of our culture and aligns with our mission to Make Life Great. It’s the right thing to do.”

The investments in people and community will take effect over the next several months. – Jan. 10, 2018 Great Western Bancorp, Inc. press release

High Speed Research Network (Madison, South Dakota) – Technology investments in an Opportunity Zone created by the Tax Cuts and Jobs Act:

Today, U.S. Secretary of Commerce Wilbur Ross announced that the Department’s Economic Development Administration (EDA) is awarding a $1.46 million grant to Dakota State University in Madison, South Dakota, to help establish a high speed research network. The investment, located in a Tax Cuts and Jobs Act designated Opportunity Zone, will be matched with $1.46 million in local funds.

“The Trump Administration is continuing to work diligently to bring new opportunities for growth to Tax Cuts and Jobs Act designated Opportunity Zones and ensure our businesses have the resources they need to grow and prosper,” said Secretary Ross. “DSU’s new high-speed network will help deliver secure research to accommodate new and established private sector startups and partners.”

“Dakota State University is a leader in post-graduate technological studies not just in South Dakota, but throughout the country,” said Senator Thune. “Thanks to the Tax Cuts and Jobs Act and its focus on Opportunity Zones, Dakota State will have the opportunity to build off its well-established success by creating a high-speed research network with help from this important federal grant and strong local support. I’m not surprised to see that Dakota State is deepening its roots in the Madison area, which is why I’m excited to see what the future holds for this project and those that are surely yet to come.”

The project will procure research computing equipment for two projects: The Madison CyberLabs (MadLabs), an $18 million, 40,000 square foot development that will house applied research projects for faculty, researchers, students and corporate partners; and for the Heartland Technology Center, a business incubator housing DSU spin-off companies, startup companies relying on the expertise of DSU students and other affiliated organizations or corporate partners. This project was made possible by the regional planning efforts led by the First District Association of Local Governments. EDA funds the First District Association of Local Governments to bring together the public and private sectors to create an economic development roadmap to strengthen the regional economy, support private capital investment and create jobs.

The funding announced today goes to a Tax Cuts and Jobs Act designated Opportunity Zone, which provides special incentives for further private sector participation and development. Created by President Donald J. Trump’s Tax Cuts and Jobs Act of 2017, Opportunity Zone designations spur economic development by giving tax incentives to investors in economically-distressed communities nationwide. – May 22, 2019 Sen. John Thune press release

Walmart – South Dakota employees at 15 Walmart stores received tax reform bonuses, wage increases, and expanded maternity and parental leave. Walmart employees who adopt children will be given $5,000 to help cover expenses.

AT&T — $1,000 bonuses to 195 South Dakota employees; Nationwide, $1,000 bonuses for 200,000 employees and a $1 billion increase in capital expenditures:

Today, Congress approved legislation representing the first comprehensive tax reform in a generation. The President is expected to sign the bill in the coming days.

Once tax reform is signed into law, AT&T* plans to invest an additional $1 billion in the United States in 2018 and pay a special $1,000 bonus to more than 200,000 AT&T U.S. employees — all union-represented, non-management and front-line managers. If the President signs the bill before Christmas, employees will receive the bonus over the holidays.

“Congress, working closely with the President, took a monumental step to bring taxes paid by U.S. businesses in line with the rest of the industrialized world,” said Randall Stephenson, AT&T chairman and CEO. “This tax reform will drive economic growth and create good-paying jobs. In fact, we will increase our U.S. investment and pay a special bonus to our U.S. employees.”

Since 2012, AT&T has invested more in the United States than any other public company. Every $1 billion in capital invested in the telecom industry creates about 7,000 jobs for American workers, research shows. — Dec. 20, 2017 AT&T Inc. press release

Home Depot — Sioux Falls, South Dakota – Bonuses for all hourly employees, up to $1,000.

Lowe’s — 400 employees at three stores in South Dakota. Employees will receive bonuses of up to $1,000 based on length of service, for 260,000 employees; expanded benefits and maternity/parental leave; $5,000 of adoption assistance.

Ryder (Sioux Falls and Rapid City) – Tax reform bonuses to employees.

Best Buy — Three locations in South Dakota; $1,000 bonuses for full-time employees; $500 bonuses for part-time employees.

Cintas (Sioux Falls, South Dakota) — $1,000 bonuses for employees of at least a year, $500 for employees of less than a year.

Taco John’s (36 locations in South Dakota): All full-time and part-time crew members received a $200 after-tax bonus:

Taco John’s International, Inc. announced today that in response to the 2018 Tax Cut and Jobs Act, the company gave part of its projected tax savings to its restaurant crews, general managers, corporate staff and CORE (Children of Restaurant Employees).

On Friday, Feb. 23, Taco John’s International, Inc.’s employees received a one-time bonus, as follows:

• Every restaurant crew member – full-time and part-time – received $200 (after taxes);
• General managers and employees at the Taco John’s Franchisee Support Center in Cheyenne received $1,000 each; and,
• The Executive Council of Taco John’s International, Inc. (Vice Presidents and above) donated their $1,000 bonuses (a total of $10,000) to CORE, a national not-for-profit organization that grants support to children of food and beverage service employees who are navigating life-altering circumstances.

“At Taco John’s International, our team is our family, so sharing the financial benefits that were a result of the recent tax reform legislation only makes sense,” said Jim Creel, CEO of Taco John’s International, Inc. “We encourage other restaurant brands to follow our example and give a portion of their savings to the people that are at the heart of what we do and to great organizations like CORE that support our crew. One hundred percent of CORE’s funds directly benefit children of restaurant employees who have been afflicted with life-threating conditions.”

“We are so grateful to the Taco John’s team for their generous donation to our CORE family members,” said Lauren LaViola, executive director of CORE. “Donations like theirs help us provide for our food and beverage service families experiencing loss, illness and other life-changing circumstances, and help us get closer to our goal of helping even more families across all 50 states in 2018.”

The total amount that Taco John’s International, Inc. gave exceeded $150,000.00. – Feb. 28, 2018 Taco John’s International, Inc. press release

Chipotle Mexican Grill (Multiple locations in South Dakota) – Bonuses ranging from $250 to $1,000; increased employee benefits; $50 million investment in existing restaurants.

Comcast (Multiple locations in South Dakota) — $1,000 bonuses; nationwide, at least $50 billion investment in infrastructure in next five years.

Starbucks Coffee Company (25 locations in South Dakota) –$500 stock grants for all retail employees, $2,000 stock grants for store managers, and varying plan and support center employee stock grants. Nationally, 8,000 new retail jobs; an additional wage increase this year, totaling approximately $120 million in wage increases, increased sick time benefits and parental leave.

T.J. Maxx – (Locations in Sioux Falls and Rapid City) – Tax reform bonuses, retirement plan contributions, parental leave, enhanced vacation benefits, and increased charitable donations:

The 2017 Tax Act benefited the Company in the fourth quarter and full year Fiscal 2018. The Company expects to continue to benefit from the 2017 Tax Act going forward, primarily due to the lower U.S. corporate income tax rate. As a result of the estimated cash benefit related to the 2017 Tax Act, the Company is taking the following actions:

Associates

• A one-time, discretionary bonus to eligible, non-bonus-plan Associates, globally
• An incremental contribution to the Company’s defined contribution retirement plans for eligible Associates in the U.S. and internationally
• Instituting paid parental leave for eligible Associates in the U.S.
• Enhancing vacation benefits for certain U.S. Associates

Communities

Made meaningful contributions to TJX’s charitable foundations around the world to further support TJX’s charitable giving – Feb. 28, 2018 The TJX Companies Inc. press release excerpt

U-Haul (Multiple locations in South Dakota) – $1,200 bonuses for full-time employees, $500 for part-time employees.

FedEx (Multiple locations in South Dakota) – Accelerated and increased compensation; pension plan contributions:

FedEx Corporation is announcing three major programs today following the recently enacted U.S. Tax Cuts and Jobs Act:

• Over $200 million in increased compensation, about two-thirds of which will go to hourly team members by advancing 2018 annual pay increases by six months to April 1st from the normal October date. The remainder will fund increases in performance- based incentive plans for salaried personnel.
• A voluntary contribution of $1.5 billion to the FedEx pension plan to ensure it remains one of the best funded retirement programs in the country.
• Investing $1.5 billion to significantly expand the FedEx Express Indianapolis hub over the next seven years. The Memphis SuperHub will also be modernized and enlarged in a major program the details of which will be announced later this spring.

FedEx believes the Tax Cuts and Jobs Act will likely increase GDP and investment in the United States. — Jan. 26, 2018 FedEx press release

Waste Management Inc. (Multiple locations in South Dakota) — $2,000 bonuses:

In light of the meaningful contributions of its employees and the new U.S. corporate tax structure, the company will distribute US $2,000 in 2018 to every North American employee not on a bonus or sales incentive plan; that includes hourly and other employees.

“We are about to get a tax benefit as our U.S. corporate tax rate goes from 35 percent to 21 percent. In considering how to best spend that, we wanted to find a way to help grow our economy, which in turn, will help grow our business, and give some of the tax savings back to those hardworking employees who do not get the opportunity to participate in our salaried incentive plans,” said Jim Fish, president and chief executive officer, Waste Management.

“So, we are offering each North American hourly full-time employee and salaried employee who does not participate in any sales incentive or bonus plan during 2018, a cash bonus of US $2,000 to show our appreciation to so many of our valued employees while growing our business and returning a good portion of the tax savings directly to the overall economy,” he continued. – Jan. 10, 2018 Waste Management Inc. press release excerpt

McDonald’s (35+ locations in South Dakota) – Increased tuition investments which will provide educational program access for 400,000 U.S. employees. $2,500 per year (up from $700) for crew working 15 hours a week, $3,000 (up from $1,050) for managers, and more:

McDonald’s Corporation today announced it will allocate $150 million over five years to its global Archways to Opportunity education program. This investment will provide almost 400,000 U.S. restaurant employees with accessibility to the program as the company will also lower eligibility requirements from nine months to 90 days of employment and drop weekly shift minimums from 20 hours to 15 hours. Additionally, McDonald’s will also extend some education benefits to restaurant employees’ family members. These enhancements underscore McDonald’s and its independent franchisees’ commitment to providing jobs that fit around the lives of restaurant employees so they may pursue their education and career ambitions.

The Archways to Opportunity program provides eligible U.S. employees an opportunity to earn a high school diploma, receive upfront college tuition assistance, access free education advising services and learn English as a second language.  

“Our commitment to education reinforces our ongoing support of the people who play a crucial role in our journey to build a better McDonald’s,” said Steve Easterbrook, McDonald’s President and CEO. “By offering restaurant employees more opportunities to further their education and pursue their career aspirations, we are helping them find their full potential, whether that’s at McDonald’s or elsewhere.”

Accelerated by changes in the U.S. tax law, McDonald’s increased investment in the Archways to Opportunity Program includes:

• Increased Tuition Investment:
  • Crew: Eligible crew will have access to $2,500/year, up from $700/year.
  • Managers: Eligible Managers will have access to $3,000/year, up from $1,050.
  • Participants have a choice for how they apply this funding – whether it be to a community college, four year university or trade school. There is no lifetime cap on tuition assistance – restaurant employees will be able to pursue their education and career passions at their own pace. The new tuition assistance is effective May 1, 2018 and retroactive to January 1, 2018.
• Lowered Eligibility Requirements: Increase access to the program by lowering eligibility requirements from nine months to 90 days of employment. In addition, dropping from 20 hours minimum to 15 hours minimum (roughly two full time shifts) per week to enable restaurant employees more time to focus on studies.
• Extended Services to Families: Extension of Career Online High School and College Advisory services to restaurant employees’ family members through existing educational partners Cengage and Council for Adult and Experiential Learning (CAEL).
• Additional Resources: Career exploration resources for eligible restaurant employees to be available later this year.
• Creation of an International Education Fund: Grants to provide local initiatives and incentives in global markets to further education advancement programs.

“Since its inception, Archways to Opportunity was meant to match the ambition and drive of restaurant crew with the means and network to help them find success on their own terms,” said David Fairhurst, McDonald’s Chief People Officer. “By tripling tuition assistance, adding education benefits for family members and lowering eligibility requirements to the equivalent of a summer job, we are sending a signal that if you come work at your local McDonald’s, we’ll invest in your future.”

After launching in the U.S. in 2015, Archways to Opportunity has increased access to education for over 24,000 people and awarded over $21 million in high school and college tuition assistance. Graduates have received college degrees in Business Administration, Human Resources, Communications, Accounting, Microbiology and more. – March 29, 2018 McDonald’s Corporation press release excerpt 

Wells Fargo (41 locations in South Dakota) — Raised base wage from $13.50 to $15.00 per hour; $400 million in charitable donations for 2018; $100 million increased capital investment over the next three years.

TCJA Utility Bill Savings for South Dakotans:

Without the Trump tax cuts, South Dakota utility bills would be even higher than they are today.

The TCJA’s corporate tax cut savings were passed along to South Dakota utility customers.

Below, please note documentation of South Dakota utilities that passed the Trump TCJA tax savings along to the consumer. Such documentation is required by state utility commissions.

Black Hills Energy (Rapid City, South Dakota) – The utility is passing along TCJA tax savings to customers:

South Dakota customers served by Black Hills Energy are seeing the benefits of the federal corporate tax rate reduction from 35 percent to 21 percent. These benefits first appeared on customers’ October 2018 bills. 

The settlement agreement provides for the benefits of tax reform for 2018 to be passed on to customers through a one-time credit on their October bill. The aggregate 2018 benefit for all customers is estimated at $7.7 million. For 2019, the settlement agreement authorizes an $8.9 million aggregate reduction in base rates for customers. This reduction will be reflected on customers’ monthly bills beginning in January 2019. — Black Hills Energy Website

Xcel Energy (Minneapolis, Minnesota) – The utility is passing along TCJA tax savings to customers:

As a result of tax reform Xcel Energy will be giving money back to you.

Xcel Energy will soon distribute approximately $10.9 million to all South Dakota customers as a result of the Federal Tax Cuts and Jobs Act. All Xcel Energy customers in the state will receive a one-time credit on their bills.

The estimated refund for a residential customer will average approximately $55.73, but will vary based on each customer’s actual usage. — July 10, 2018 KSOO article excerpt

MidAmerican Energy Co. – The utility is passing along TCJA tax savings to customers:

MidAmerican Energy Co. customers will receive a refund and rate reduction as the result of action by the South Dakota Public Utilities Commission at their regular meeting in Pierre on May 14. The approved settlement agreement, presented jointly by PUC staff and MidAmerican Energy, specifies the company will refund $3,308,988 to its South Dakota natural gas customers and $921,476 to its South Dakota electric customers.

Additionally, the commission approved reductions to MidAmerican Energy’s base rates. Natural gas rates will be reduced by $1,205,376 while electric rates will see a $359,811 reduction. The settlement also includes a revision to the energy cost adjustment related to the company’s production tax credits in consideration of the reduced federal income tax rate. — May 15, 2019 South Dakota Public Utilities Commission document

Montana-Dakota Utilities Co. – The utility is passing along TCJA tax savings to customers:

This week the South Dakota Public Utilities Commission approved a refund and reduction of rates for Montana-Dakota Utilities Co. customers as a result of the federal tax cuts enacted late last year.

The total refund to be distributed among Montana-Dakota’s natural gas customers is $1,326,915; the company will refund $591,424 to electric customers. Refunds will appear as a credit on customer accounts in mid-February. An average residential natural gas customer will receive an estimated $14.05 refund; an average residential electric customer will receive an estimated $41.84 refund. — October 16, 2018 South Dakota Public Utilities Commission document

NorthWestern Energy (Sioux Falls, South Dakota) – The utility is passing along TCJA tax savings to customers:

State regulators have approved an agreement with NorthWestern Energy to refund roughly $3 million to customers after last year’s federal tax cuts.

The South Dakota Public Utilities Commission said Tuesday that commissioners voted to accept the settlement agreement, which also bars rate hikes until 2021. The refund will be roughly $18 for an average household electric customer and about $9 for an average residential natural gas buyer. — September 18, 2018 Associated Press article excerpt

Otter Tail Power Company (Fergus Falls, Minnesota) – The utility is passing along TCJA tax savings to customers:

Today Otter Tail Power Company filed a request with the South Dakota Public Utilities Commission (SDPUC) to increase its rates. The filing starts a nearly year-long process, often referred to as a rate case, during which the SDPUC first reviews the costs the company incurs to provide customers with energy and related services and then determines how much customers should pay for those services.

“Because of the Tax Cuts and Jobs Act we were able to offset some of the cost to provide service to South Dakota customers,” said Rogelstad. “We determined that reducing our overall rate increase request by more than $1 million is the most efficient and effective means of returning the cost-savings benefits to our customers.” — April 21, 2018 Otter Tail Power Company press release

Note: If you know of other South Dakota examples, please email John Kartch at jkartch@atr.org

The running nationwide list of companies can be found at www.atr.org/list