The Legislature did what the Governor told them yesterday and increased the amount of sales tax that will come out of our pockets. In Special Session yesterday, the Legislature passed Senate Bill 1, which will require online vendors to act as sales tax collection agents for the state of South Dakota as of November 1. The Legislature also passed Senate Bill 2, which says that, starting March 1 next year, Amazon and other big online vendors are responsible for collecting tax on sales by the third-party sellers who use those vendors as their sales platform. Governor Daugaard signed the bills immediately.
Seven Republicans were predictably cranky enough to vote against SB 1: Senators Stace Nelson, Phil Jensen, and Lance Russell and Representatives Chip Campbell, Tom Pischke, Drew Dennert, and Dan Kaiser. But their votes, plus the testimony of Tonchi Weaver in the House chamber before the House and Senate assembled as committee of the whole, were the only bits of futile dissent among Republicans committed to raising your taxes.
That District 3’s whole House contingent voted nay is noteworthy: now I must decide whether my ticketmates Justin Roemmick and Brooks Briscoe will get more traction campaigning against Rep. Dennert’s vote against “Main Street fairness” or if I will get more traction campaigning against Senator Al Novstrup’s ongoing commitment to taking more tax dollars out of working folks’ pockets.
“Main Street fairness” was the banner under which Senator Deb Peters (R-9/Hartford) pushed this new extra-territorial taxing authority through the Legislature and toward the Supreme Court in 2016. Tax-increaser Rep. John Wiik (R-4/Big Stone City) said yesterday that SB 1 would “bring balance to the marketplace.” But not really: the law still favors out-of-state e-vendors over local brick-and-mortar shops. A Minnesota crafter who Etsies some scarves to South Dakotans gets to make her first 200 sales into South Dakota or her first $100,000 of sales (whichever comes first) tax-free. If she puts her wares in a local boutique or sells from a tent at any of our summer arts-in-the-parks, she has to collect sales tax on scarf #1, just as all of our local vendors must. SB 1 protects that 200-sale/$100,000 sales tax exemption for entrepreneurs who choose not to set foot in our state.
Funny that the state would incentivize not setting up shop in South Dakota.
The Governor discouraged any action on other details like the flawed Partridge Amendment, which is intended to step our sales tax percentage down next year in response to the increase in online sales tax revenue. Our passive legislators, naturally, made no such fuss. That’s probably fine: our Legislature lacks at least the ambition if not the organization and intellect to fix that provision in a single day, and I would rather see that debate take place over the course of a full Session, with far more opportunity for public study and input. If $58 million in new money is eventually going to flow into state coffers, we should take our time in figuring out if we stick with the plan of directing that money toward overall sales tax relief, toward specific reduction of the oppressive food tax, or toward other fiscal priorities. So the Partridge Amendment will be up to us to fix (us, as in the at least 12-member Democratic caucus South Dakotans will send to the Senate to back up Governor Billie Sutton!).
But remember: we won’t see any $58 million right away. The take from November and December will be smaller than the future predicted average since vendors will only start counting their sales on November 1. Businesses that normally reach the 200-sale/$100,000 threshold over an entire year may not reach it in just the last two months of the year, so the number of vendors collecting this year will be smaller than the future normal number (although Christmas scales will skew that fraction from a pure monthly-average calculation).
The other highlight of the day: I heard Lee Strubinger say on SDPB yesterday that Rep. Karen Soli (D-15/Sioux Falls) returned to the House floor yesterday after missing the entire 2018 Regular Session and reported she is cancer-free. Hear hear!
Your title would be more truthful and factual if it said:
South Dakotans wil now pay the correct and lawful amount of sales tax.
Why is everyone happy we are paying more taxes. More money for Pierre to waste.
“marketplace fairness” – that’s nice word salad, but, I never used on-line shopping to dodge paying taxes. That NEVER figured in with my on-line shopping strolls. The $1.75 here, or the $3.18 there —– isn’t going to change my shopping habits. I shopped online for convenience and because I found items not offered by SD retailers.
This is all about the SD legislature figuring out a cute way to collect more money to give to their cronies.
SD retailers, let’s just sit back now, and watch the amazing wave of customers you will now get because of this move. (psssst, won’t happen)
@CAH Lost in the smarmy rhetoric is the fact that they actually created a new tax. Currently if you sell new or used items on EBay infrequently you are not required to procure a sales tax license nor collect sales tax. These bills change that. Every item sold on EBay after these bills are fully enacted will be taxed.
Indications are that online tax exempt items will also be treated in similar fashion. So all the rhetoric about “fairness” is insincere. This was all about these tax and spenders getting more of the tax payers monies. They were down right giddy and falling over themselves in their rush to do so.
Mr. Nelson, I have never agreed with you on much of anything. In this case, you are absolutely correct and I commend you for your stand. So now what? Are they wanting to administer it like gaming? That should go over well. Bigger government with less purpose, with little or nothing coming back to taxpayers.
Stace, if you were to advertise your mug on a Republican blog, you wouldn’t pay any sales tax. If you were to put that same pretty mug on yard signs from that Republican blogs political supply company, you would have to pay sales tax. Why is that? Advertising, political or otherwise, is exempt in newspapers, on radio, television or internet. But print it on anything else and its charged. It sounds rather random and arbitrary.
Well, what it is is an income tax. People in the lower socioeconomic strata spend nothing or very little on line. They go to the store and buy their food and trinkets, and get hammered by a sales tax that falls on them much more than on the wealthy. The wealthy have tended to shift their purchases, especially big purchases, to on-line vendors, where they have escaped taxation. In essence the wealthy have been cheating the tax system, and now they are going to have to pay something.
If people are selling items on EBay, they should be paying sales tax. If you have a yard sale once or twice a year, you don’t have to pay sales tax, but EBay is a major marketing company that has a presence at every instant of time. It’s like Pac Rat Palace in Rapid City. (Are they still in business?) They collected sales tax on your consigned products.
I tend to buy online for the convenience, options, and ability to not buy something at Wal-mart. I have no problem paying a sales tax. As Donald pointed out, this tax tends to affect those who routinely purchase things online, often expensive items. Why is instituting this a bad thing in itself?
What do main street businesses think of this? I’m honestly curious.
I’d think they’d want a level playing field
Point of Order, Mr. Nelson. It is not a new tax. You were informed of this. And e-bay is for grandmas who sell knitted hats online, by golly.
Mr. H, what makes you think it was uneventful. I just bet you a gravy laden breakfast that there was much maneuvering and machinating behind the scenes for the positions in the leaderships of the legislatures, about the caucusing, and for the who-sits-where arguments they always have. Perhaps Mr. Nelson will let us in on those, if he wasn’t kicked out of the caucuses already.
How will SD catch cheaters? If I’m selling artwork that totals $1300 (I wish) from Minnesota, how will they know? Seriously. I mean, maybe I require buyers pay me via money order sent through snail mail. But even if it’s all credit cards, how will they know?
If this is a dumb question, oh well.
Actually, Jason, your headline is false, while mine is true. I make the simple statement that this change means South Dakotans pay more sales tax. Undenied. Irrefutable. Motivation for the whole bill and Supreme Court case (as Daugaard side, this law broadens the tax base that was eroding). Your proposed alternative misstates the situation. The new SB 1 does not mean South Dakotans pay the correct and lawful amount. South Dakotans who buy from a variety of small companies out of state online may still pay less sales tax than South Dakotans buying the same goods from one large online remote seller or from in-state physically present vendors. You attempt at calling my headline false falls flat, as you miss the nuance and exaggerate, while I show restraint and only describe the simple fact of the situation, followed by a clear explanation of the impact of the law.
Don’t quit your day job, Jason. I’m far better at accurately informing the public than you are.
Uneventful, Grudz. We didn’t even get a good head count at a GOP caucus meeting to see who signed the loyalty oath and who didn’t.
Debbo, it’s not a dumb question. I’m not sure what enforcement mechanism South Dakota has in Florida. I would think we’d have to take a non-collecting vendor to federal court. Uh oh—that’s going to require an Attorney General who can actually argue cases in court. If you want to protect the Wayfair sales tax, you’d better vote for Randy Seiler!
And if Kristi becomes governor, she wants to hire a bunch of lawyers and tie them down with frivolous abortion litigation. If we want to keep the lawyers free to go chase down our sales tax, we’d better elect Billie Sutton, too!
And that, my friends, is how Cory totally owns Jason when the latter full of BS, as usual.
Thanks for the answer to my question, Cory.
@GRIDS I’ll type slow so you can keep up. Before the bills were passed into law, infrequent sales on EBay, Amazon, etc., were NOT taxed. With the passage of these bills, DOR Secretary confirmed they are. That makes it a new tax. ADDITIONALLY, with SD enacting this nationwide, it opens South Dakotans up to every tax scheme from every other tax jurisdiction nationwide. So… Yes, you establishment troll, these bills represent a massive expansion of government and a massive tidal wave of new taxes South Dakotans will be subject to.
@Debbo You hit it square on the head. The IRS has national jurisdiction on income tax with massive federal resources and they are inundated with fraud as well as cases of those who avoid paying taxes. SD enacted a nation wide taxation scheme without those resources. The scenario is more likely that remote sellers will accept the tax collection and avoid remitting them to SD.
Stace,
Correct me if I am wrong, but any SD resident owes use tax on any out of State purchase?
How can you say it is a new tax?
@Jason Up until yesterday, you were incorrect. There was a whole slew of items that were exempt to include infrequent sales by individuals. As of today, all those items sold online are now taxed. Pretty simple, they weren’t taxed before, they are now = new taxes.
Additionally, by SD “winning” the SCOTUS case, ALL states can now collect taxes on people and business in other states. By enacting these statutes and pushing SD’s sales tax laws to be collected in other states, these politicians surrendered SD’s sovereignty and surrendered South Dakotans up to be liable to every tax jurisdiction in the nation as they have committed to reciprocity agreements already.
So yes, these laws effectively enact a myriad of new tax laws that South Dakotans won’t fully realize they are subject to for many years to come.
Stace,
Use tax is owed by purchasers, not sellers. There is no exemption for that.
@Jason There was no use tax on occasional sold personal items before this was enacted, there is now. There is no use tax on a slew of exempt items by statute http://sdlegislature.gov/Statutes/Codified_Laws/DisplayStatute.aspx?Type=Statute&Statute=10-46 No matter how the establishment big spenders choose to dance around the issue, these bills in fact enacted new taxes. Additionally, these laws now enact NEW taxes on native South Dakotans in many areas of South Dakota who are now forced to pay taxes that they by law and treaty are exempt from! So? We clear? These Socialist dream bills enacted new taxes on South Dakotans.
Stace argues “facts?” with Jason. Truth takes the weekend off.
Wingnut dream bills is when the non-existent god just hands over money to red state governments so they can just give it to the greedy, not the needy.
Taxation is theft.
@Porter Careful you don’t choke on all that nasty Colorado bile.. Let me help you with some more. Know that these same RINOs that passed this massive expansion of taxation and government? They will all campaign against their Democratic opponents blaming the Democrats for their own tax and spend betrayal of the voters.
@Jason Hill these bills were a perfect example of that. It also shows that these liberals here who claim to care about Natives, show their true colors here. They don’t care that Natives will be literally robbed of their $$ from this online tax scheme as they are not supposed to be subject to it.
Lack of responsible taxation is why we Blue state residents have to dip into our paychecks every month and send money to South Dakota. We don’t demand you observe human dignity and women’s right but we’d appreciate if you’d pay your own way, once in a while.
Any republicans that are sick of non conservative policies getting initiated and enforced by the republican party are welcome to join the Libertarian Party.
Taxation is theft.
Taxation is not theft; taxation is the price of living in civilized society.
However, like Bryan, I would love to see honest Republicans abandon their dishonest leaders and crony Pierre politics in favor of supporting the Libertarian Party.
Bryan and Jason Hill – Assuming “Taxation is theft” as you say, and assuming you think theft is a bad thing that our government should never do, exactly how would you propose funding our government, including fire departments, police departments, military, roads, water, and any other functions you deem appropriate for our government? I don’t mean to argue about whether taxation is in fact theft, I just wonder what other sources of government revenue you think might be more appropriate than taxation.
Drumpf thinks he can just print more money and pay down the debt. Yeah, let’s try that for awhile.
Pootie’s Puppet Is Not smarter than a 5th grader. They have a much better grasp of economics.