Historic Day for South Dakota's Retailers: E-Fairness Law Kicks in November 1

Historic Day for South Dakota's Retailers: E-Fairness Law Kicks in November 1

South Dakota Retailers Association Starting today (November 1, 2018) the state of South Dakota is enforcing a state law that requires remote sellers who meet certain thresholds to obtain a South Dakota sales tax license, and pay applicable state and municipal sales tax.  

That's good news for the South Dakota retailers who have been pushing for tax fairness to level the playing field between main street shops and giant out-of-state online companies.  

The law was originally enacted by the state legislature in 2016 (Senate Bill 106). SDRA played a key role in drafting and passage of Senate Bill 106.   A legal challenge took the case all the way to the U.S. Supreme Court (SCOTUS), and SDRA filed two amicus briefs in support of the state. A ruling from SCOTUS in June of 2018 meant South Dakota and other states could begin requiring out-of-state online sellers to collect and remit tax on purchases sold and shipped into the state.  

South Dakota Governor Dennis Daugaard called a special legislative session in September, 2018 during which lawmakers passed two laws to provide for implementation of the sales tax collection, setting dates when the new laws would become effective (Senate Bill 1 and Senate Bill 2). Senate Bill 1 is the law that went into effect today. It only applies to businesses that meet one of two criteria:

  • The business’s gross revenue from sales into South Dakota exceeded $100,000; or
  • The business made sales for delivery into South Dakota in 200 or more separate transactions
Gross sales or transactions include the sale of tangible personal property, any products transferred electronically, or services.   Senate Bill 2, which pertains to marketplace providers, is effective March 1, 2019.   For more information visit https://dor.sd.gov/Taxes/Business_Taxes/RemoteSeller.aspx
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