From the Desk of Tim Goodwin
Greetings! Last week I printed the results of the gun
survey, and there is a lot of material to cover there, but instead I decided to
write about e-commerce sales tax. What the heck is that?
Well, it’s the tax that is due when purchases are made over the internet. Basically, it is an out of state company that doesn’t have a presence in South Dakota, like a brick and mortar building. Now, it is already state law that if we order over the internet, and a state sales tax wasn’t charged, that we citizens are supposed to go on line, and pay that tax to the State Dept. of Revenue. Really, I’m not making this up! (Senate Bill 106 passed in 2016.) The estimated lost revenue is approximately $50-60 million and rising as more business is generated through e-commerce each year.
On April 14, 2018, our Attorney General, Marty Jackley, took this issue all the way to the U.S. Supreme Court in Washington, D.C. Attorney General Jackley was lead attorney, with President Trump’s attorney being the follow on. TIME OUT!! I’m impressed! Little old South Dakota’s Attorney General represents the entire country on e-commerce tax before the U.S. Supreme Court! Unheard of!! Yep, but it’s true!
So how does it affect the average citizen in District 30? If you look around the mall area in Rapid City, you’ll see Sears, ToysRUs and Herbergers are going out of business. That’s three pretty large retailers going away, and I think it is largely due to e-commerce sales. We could at least agree that internet sales were a contributing factor.
The ruling of the U.S. Supreme Court is due (who knows?) sometime in the June 2018 time frame. If the U.S. Supreme Court rules in Attorney General Marty Jackley’s, and the state of South Dakota’s, favor, our state treasury would then get the lost $50-60 million.
Regressing, a year ago, Amazon voluntarily agreed to pay state sales tax, so their revenue is being remitted to our state treasury.
Now, here’s where it get interesting. When HB1182 was passed in 2016, raising state sales tax from 4 cents to 4-1/2 cents, there was an amendment added stating that once e-commerce sales exceeded $100 million, the ½ cent sales tax would go back to the tax payers. Yep, we would go from 4-1/2 cents, to 4 cents. You didn’t know that, did you? My first year in the legislature, I submitted a bill that would have required the state to open up its books and let the public know how much revenue that state was receiving through voluntary e-commerce sales such as Amazon and the few SD residents that were submitting their e-commerce tax to the state. Simple enough?
I envisioned a thermometer like the United Way uses, and it would let every citizen know the amount received, say on a weekly basis, so if Amazon paid in $40 million, and other remittance was $10 million, the thermometer in red would read $50 million with $100 million being the top of the chart/thermometer. Once we hit $100 million, the ½ cent sales tax would automatically go back to the tax payers because that’s the law. So, how did I do? It was a complete belly flop off the high dive, and was killed in the tax committee 13-2!!
In review, if we as a state get a favorable ruling from the U.S. Supreme Court, I’m going to do everything possible to make sure we tax payers get our reduction in state sales tax. It’s in the law for Heaven’s sake! Once we hit $100 million, the ½ cent added in 2016 goes back to 4 cents.
Stay tuned because the big government, big spend liberals from both parties are going to oppose me every step of the way.
Tim R. Goodwin, Representative, District 30

