Governor Signs Tax Fairness Laws Passed During Special Session

Governor Signs Tax Fairness Laws Passed During Special Session

South Dakota Retailers Association

After leading the U.S. Supreme Court victory in taxation of remote sales, South Dakota will soon be among the states benefiting from the Wayfair decision*.

On September 12, 201, Gov. Dennis Daugaard signed into law a measure which removes the imposition of an injunction against collection of sales tax on remote sales. Senate Bill 1 will go into effect on November 1, 2018, allowing the state of South Dakota to enforce sales tax collections from those who meet the $100,000 in sales or 200 transaction threshold.

“This has been more than 50 years in the making. Today is the culmination of efforts by many South Dakotans over the years and I thank all who have played a part,” said Gov. Daugaard. “We have finally succeeded in leveling the playing field for all who do business in our state – and we have paved the way for any other state that wishes to pursue tax uniformity.”

Gov. Daugaard convened the Legislature on September 12 for a special session to consider Senate Bill 1 as well as Senate Bill 2 and House Bill 1001. All three bills received legislative approval and were signed by the Governor on the afternoon of September 12. SB 2 requires marketplace providers to attain a sales tax license and remit sales tax on behalf of sellers utilizing their services. HB 1001 clarifies the start date of the next governor to allow for a clear transfer of authority in January.

- News release from Gov. Dennis Daugaard

NOTE: South Dakota Retailers Association lobbyist Jim Hood testified in support of the measures approved by the Legislature during the special session.He explained that SDRA has had a standing position since 1937 that out-of-state companies selling goods into the state should be remitting the same sales tax as in-state companies. (At that time, of course, it wa catalog companies we were speaking about.) As Hood stated when testifying before the full Hosue and Senate on September 12, "Our retailers have been asking for tax fairness for 81 years. Today is the day for the Legislature to take the final step necessary to make that happen, for the good of our retailers, for the good of our communities, and for the good of the state."

* In June, the U.S. Supreme Court ruled in favor of South Dakota in South Dakota v. Wayfair, Inc., a case that establishes tax fairness between brick and mortar businesses and large, out-of-state online companies. Prior to the 5-4 ruling handed down on June 21, 2018, remote sellers were not required to collect and remit sales tax on purchases unless they had a physical presence in the state.

The South Dakota Retailers Association played a key role in passage of the 2016 state law which made its way to the U.S. Supreme Court, and filed two amicus briefs with the Supreme Court in support of the state's case.

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