The South Dakota Legislature is struggling to pass an extra half-penny sales tax to fund teacher pay, but they’re having no trouble moving a bill to challenge the Supreme Court for the right to extract sales tax from out-of-state merchants taking advantage of e-commerce to dodge our taxes.
House State Affairs this morning unanimously passed Senate Bill 106, the Main Street Fairness Act, as the South Dakota Retailers and other supporters call it. SB 106 would aggressively seek from Amazon.com and other online sellers the same sales tax that Red Rooster and Zandbroz have to collect when they sell items to South Dakota customers.
Rep. Roger Hunt (R-25/Brandon), the prime House sponsor, told the committee that SB 106 does not impose a new tax (heavens no—we’ve got Americans for Prosperity and the Koch Brothers to keep happy). Rep. Hunt also noted the eleven findings written into SB 106, which make clear that the Legislature is spoiling for another lawsuit (Rep. Hunt likes that sort of thing.) SB 106 seeks to get the Supreme Court to revisit and reverse Quill Corp. v. North Dakota (1992), in which the Supreme Court said states can’t impose sales and use tax on retailers who don’t have physical storefronts in their states.
Perhaps worth noting: Justice Antonin Scalia concurred with the majority in Quill. Arguably, appointing and confirming a new Supreme Court Justice to replace Scalia this year could improve the chances of South Dakota’s prevailing in the desired eventual lawsuit over SB 106. Paging Senator Thune….