Special Legislative Session
Greetings! On September 12, our governor called a
special session. Subject: eCommerce
sales. Yep, the stuff you buy at home
through the internet.
What happened before September 12th needs to be mentioned here. Marty Jackley, our Attorney General, went before the U.S. Supreme Court in Washington D.C. for the case SD vs Wayfair, Inc. The U.S. Supreme Court ruled in S.D. and Jackley’s favor that yes, we as a state have the right to collect sales taxes on eCommerce, or commonly called, internet sales.
This is a fairness issue. Our “brick and mortar” businesses on main street have to charge sales tax. However, items purchased online were not always charged.
It should be noted here that all items purchased over the internet were required to have sales tax charged. What does that mean? It means that if we ordered something over the internet, and the company we ordered from didn’t pay the sales tax, as South Dakota residents, we are required to remit the tax. We were supposed to send a check to the State for the sales tax that wasn’t collected. Seriously, I’m not making this up!
Yours truly did not comply, along with 99% of all SD residents. Damn, I shouldn’t have included myself, as now the SD Dept. of Revenue will be knocking at my door! Oh, well, bring it on. I have a lot to visit with those folks about. I digress…
Back to fairness issue of local businesses charging and eCommerce not, and residents not sending in sales tax. Let me use an example:
My district 30 mate, and your other representative, Rep. Julie Frye-Mueller has a family-owned business in Rapid City. It’s called Frye Paint and Supply. They sell paint and stain along with a lot of other items, including flooring. Let’s use flooring as an example. A customer comes in the store and is interested in flooring. Julie, or one of the employees, waits on the customer and provides them with color schemes and flooring samples to take home in hope that the customer will return to the store and order the flooring.
In some cases, the customer goes home, picks out the flooring color and style, finds the manufacturer and stock number on the samples, and orders the flooring online. Rep. Frye-Mueller is lucky to even get the samples back, let alone the sale.
When the customer orders online, sometimes the customer doesn’t pay sales tax. In most cases, over 99%, the customer doesn’t submit the state sales tax.
So, what I’m having a hard time saying is this: At the very least, the online company should have to pay state sales tax, the same as one of our main street businesses. It makes sense to me, and I hope it makes sense to you. I voted in favor of eCommerce sales tax, but I do have some concerns.
In past columns, I’ve mentioned the Partridge amendment that was added to get a ½ cent sales tax passed for teachers pay and property tax relief. The teachers did get their pay increases, yes . The property tax relief not so much. In that amendment it stated in a nutshell that once the eCommerce hit $100 million, the ½ cent sales tax would go back to the tax payers.
News flash ladies and gentlemen! We are going to hit $100 million! BUT, the state of South Dakota is doing everything within its power not to give us the tax payers back our ½ cent sales tax! One last thought here: If we can force the state to honor the Partridge amendment, we are not going back on our teachers. The reasoning, in my opinion, was that when $100 million collected in eCommerce would have offset the ½ cent increase, we weren’t elected yet. (When that legislation was passed.) Until next week.
Tim R. Goodwin, Representative, District 30

