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Daugaard Declines to Include Wayfair Revenue in Projections But Calls for Eight New Agents to Enforce Online Sales Tax

In his budget suggestions Tuesday, Governor Dennis Daugaard declined to include any revenue boost from the new remote-seller sales tax made possible by South Dakota’s victory in the Wayfair decision in his fiscal projections. Governor Daugaard offered guesstimates of $13.1 million to $23 million of new revenue that might come from out-of-state online vendors who weren’t contributing to our general welfare pre-Wayfair, but citing uncertainty about sales and compliance, Governor Daugaard said the “prudent course is to budget for $0.”

However, said uncertainty did not stop Governor Daugaard from including eight new FTEs in his budget proposal for the Department of Revenue.

Bureau of Finance and Management, "Summary of Recommended Budget Adjustments," Recommended FY2020 Budget, 2018.12.04, p. 14.
Bureau of Finance and Management, “Summary of Recommended Budget Adjustments,” Recommended FY2020 Budget, 2018.12.04, p. 14.

According to the summary of proposed FY2020 budget adjustments, Governor Daugaard anticipates the Department of Revenue will need five more auditors to focus on sales and use tax audits of out-of-state businesses, two more agents to work primarily on remote sellers, and one more agent to “work with collection efforts of delinquent returns and taxes associated with licenses as a result [of] the SD vs. Wayfair decision” [page 14]. Total cost of these eight new hires: $483,467.

Our Wayfair windfall is fizzling fast, from the $58 million Governor Daugaard suggested last summer to zero new cash and a half-million in expenses for bigger government.

And remember, even if some money does turn up, the Partridge Amendment (if the Legislature wrote it right, or amends it to work) will give that money back, and we still won’t see a revenue increase, even as we hire more agents to enforce it.


  1. Stace Nelson 2018-12-06 11:31

    Shocking (not) that their tax expansion produced more government which consumes more tax revenues which are taken from the pockets of hard working South Dakotans.

    This massive tax expansion was done by “Republicans” who claim to be members of the limited government party.

    Guaranteed they campaigned and claimed to be in favor of limiting government and claimed to work to limit taxes.. even as they claimed their Democrat opponents shouldn’t be voted for because Democrats are for more government/taxes.

    Term of the day: “cognitive dissonance”

  2. Michael L. Wyland 2018-12-06 11:59

    I thought there was a counterbalance written into the online sales tax statute that offset increased revenues from online sales tax with marginal reductions in other sales taxes.

  3. o 2018-12-06 12:06

    The big/small government debate is one of the central tenants of the whole political debate. Democrat/Liberals want more services — so bigger government; Republicans/Conservatives want smaller government — so fewer services. To manage both bigger government without increasing services puts Stace and me on the same page of objection and that is quite an accomplishment.

    We need a clip of “Pee Wee’s Playhouse” characters erupting each time “cognitive dissonance” is mentioned — or a stuffed bird should drop down with a sign that says that (for those of us old enough to remember Groucho’s “You Bet Your Life” secret word gimmick).

  4. Jason 2018-12-06 12:32

    The goal should be the most efficient Government using the smallest number of employees to accomplish that goal.

  5. leslie 2018-12-06 13:32

    Kennedy Noem=efficiency? Adding COS because elected AG hasn’t the experience to run the state’s largest law firm? As a cog of the GOP or all the people?

  6. o 2018-12-06 15:29

    Jason, your statement on face would lead one to conclude that no government is the most “efficient” and certainly has the “smallest number of employees.” Before speaking of efficiencies and size, the decision of the scope of services that are in the best interest of the public who created that government has to be resolved. The size of government (and I will concede that we all want efficiency — as long as it is not at the cost of effectiveness) has to be a first and foremost a function of its service to the public good.

  7. John 2018-12-06 18:11

    The lies and mis-representation of the state, the AG’s arguments, and the false hope of the Wayfair nonsensical decision is coming home to roost.

    Wayfair was as stupid as the knucklehead’s allegation that tariffs are good for trade and the economy when the tariffs are passed through to the consumers, increasing our prices we pay and decreasing our purchase options. 90%+ reduction in soybean exports was telling – McFly? McFly? (Knock on skull) Is there anyone in there, McFly?

    The truth is that state and national governments are becoming more irrelevant in the internet era. We can become individual sovereigns.

  8. Debbo 2018-12-06 21:04

    Stace, cognitive dissonance is perfect for the SDGOP. There’s often minimal relationship between what they say and what they do.

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