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Daugaard May Convene Special Session to Resolve Wayfair Sales Tax

Special Session! Special Session! Chief of staff Tony Venhuizen is telling the press that his boss, Governor Dennis Daugaard, is considering convening the Legislature to put the Supreme Court’s ruling on collecting sales tax from remote sellers into action:

“The Governor wants to expedite implementation so the state can begin to collect these taxes,” Venhuizen wrote. “The reason he reached out to legislative leaders is to alert them to the possibility of a special session, so legislators have plenty of notice if it becomes necessary.”

Venhuizen says S.D. Department of Revenue officials are meeting with their counterparts from other states this week to discuss the implementation of the South Dakota v. Wayfair decision [Todd Epp, “Gov. Daugaard’s Top Aide Says Special Session on Online Taxes Possible,” KELO Radio, 2018.07.25].

Special Session! Whoo-hoo! I’ll take Legislative action any time I can get it! And oh, what spectacle, to have legislators in Pierre possibly voting to increase taxes mere weeks before an election!

If legislators do come back to Pierre for sales tax action, watch very carefully what they do to the Partridge Amendment. In 2016, Rep. Jeff Partridge (R-34/Rapid City) amended the big Blue Ribbon teacher pay plan to lower the increased sales tax rate by a tenth of a percentage point for every $20 million that an eventual remote-seller sales tax might bring in. That amendment, now in SDCL 10-64-9, helped grease the wheels to pass the teacher pay plan. But as Venhuizen told Joint Appropriations in its interim meeting yesterday, the Partridge Amendment turns out to be revenue-negative:

Hypothetically, the Partridge amendment would mean the first $20 million of new revenue from taxing remote sales would cut the sales tax rate to 4.4 percent. At $40 million, the rate would drop to 4.3 percent, and so forth.

One catch Venhuizen identified was state government currently receives about $22.6 million per each one-tenth of 1 percent of sales tax [Bob Mercer, “Officials Discuss Next Steps After SD’s Court Victory in Taxing Remote Sales,” Aberdeen American News, 2018.07.25].

Venhuizen told the committee that the Governor wants to deal with the Partridge Amendment next year during the regular Session. But if legislators assemble early, you can bet there will be talk (and should be!) of the net fiscal impact of any changes they make to implement the Wayfair ruling.


  1. Dana P 2018-07-26 09:44

    quick correction, Cory. (smile) It should read, “his boss AND father-in-law”….. heh heh. I like to keep the nepotism that exists in Pierre front and center.

    I agree, that discussing raising our taxes right before midterms? Oh my!! I like that. I say, go for it GOP’ers. Let’s see what shell game is afoot.

  2. Roger Elgersma 2018-07-26 12:16

    If it is revenue neutral, they should do it all or do nothing. Just a politics game and maybe just looking to lower their own taxes while taxing out of staters. Typical selfishness of the right wing. They say they are for personal responsibility, but not really.

  3. jimmy james 2018-07-26 12:18

    Maybe an even bigger concern for the Governor should be the farm/tariff issue. Just saw Noem on MSNBC defending Trump’s tariffs and even attacking Rod Rosenstein. Seemed odd.

    Is she worried about her right flank?

  4. jimmy james 2018-07-26 12:23

    Maybe a bigger concern for the Governor should be the farm/tariff issue. Just saw Noem on MSNBC defending Trump’s tariffs and attacking Rod Rosenstein. Seemed odd.

    Is she worried about her right flank?

  5. Jason 2018-07-26 12:41

    SD Citizens have always been subject to the sales tax on out of State purchases. They will not be raising taxes.

  6. Daniel Buresh 2018-07-26 14:46

    Jason, you are correct. Just watch as tax revenue goes up because I would guess 99% of people weren’t paying it before….so in that sense, it will be a new tax for all of those people.

  7. leslie 2018-07-26 22:49

    Yes Noem’s repetition (3xs) gets angrier as she regurgitated “farmers want to do what they do best, on a level playing field, feed the world; Trump The BEST negotiator in the world,is serving our farmers. Commodities have been so low so long”. I know the GOP is all about fairness.snark

  8. Cory Allen Heidelberger Post author | 2018-07-27 07:45

    Practically, South Dakotans will be paying more taxes.

    And legally, if the Legislature changes the Partridge Amendment—i.e., if they reduce the reduction that would take place under current law in order to make up for earlier bad math—they will be causing tax rates to by higher than they would under the status quo. That’s a tax increase.

  9. Jason 2018-07-27 07:57


    South Dakotans spent the tax money they didn’t send to Pierre.

    They didn’t put it in a savings account.

  10. Nick Nemec 2018-07-27 08:25

    If the overall sales tax rate is reduced to compensate for extra money sales tax collected then this decision will be a tax increase for South Dakotans. Visitors traveling through the state will be paying a marginally lower sales tax rate on the goods and services they purchase while in SD and South Dakotans will pay sales tax on stuff they purchase online that they previously didn’t pay tax on. The overall tax result will be that South Dakotans will be paying a higher percent of total sales tax collected and visitors will be paying a lower percent of total sales tax collected.

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