U.S. Supreme Court Agrees to Hear South Dakota's Tax Fairness Case

U.S. Supreme Court Agrees to Hear South Dakota's Tax Fairness Case

South Dakota Retailers Association

There was good news today for South Dakota's retailers when the U.S. Supreme Court announced it has agreed to take up the State of South Dakota's lawsuit over tax fairness for out-of-state online companies.

Under a U.S. Supreme Court decision issued more than a quarter century ago, a state can't require out-of-state companies to charge sales tax on purchases shipped into a state, unless the company has a physical presence in that state.

South Dakota enacted a law in 2016 (Senate Bill 106) that requires larger companies to collect and remit tax on goods sold and shipped into South Dakota. The 2016 state law was put on hold pending court appeals, and it has now made its way to the Supreme Court.

SDRA filed an amicus brief in support of the State of South Dakota, and applauds today's announcement. SDRA believes the out-of-state companies should be playing by the same tax rules as our in-state retailers.

“It’s incredibly important both to the retailers of South Dakota and to the State itself,” said SDRA Board President Gary Cammack. “For brick and mortar retailers in the state, it’s about leveling the playing field when compared to online only retailers. As for the State of South Dakota, funded largely by sales tax dollars, the lost revenue due to the loophole that currently exists strains the State’s budget. Having that revenue, which is already rightfully owed to the state, would make a huge difference.”

The State of South Dakota and municipalities lose an estimated $50 million annually in sales tax revenue due to these untaxed sales.

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