Supreme Court hands a win to South Dakota; fiscal impact unclear

The U.S. Supreme Court’s decision to allow states to collect sales tax from online retailers upheld a South Dakota law passed in 2016 and sponsored by Sioux Falls area legislator, State Sen. Deb Peters. Several online retailers shared that it would not have a major impact as they were already complying with state sales tax laws. In South Dakota, the Supreme Court decision is considered a victory for “main street” retailers in that it levels the playing field as they compete with online retailers.

Under the South Dakota legislation, there is a safe harbor which protects retailers that conduct limited amounts of business. The law only applies to businesses that sell $100,000 in goods or services a year or conduct 200 transactions.

Other states will look to the South Dakota law for guidance on how to move forward. Opponents of the Supreme Court decision countered that Congress should have acted to ensure some uniformity among the 50 states.

Only five states – Alaska, Delaware, Montana, New Hampshire and Oregon – do not have a statewide sales tax.