JUNE 22, 2023:
South Dakota Attorney General Marty Jackley said five years after it was decided, the United States Supreme Court’s decision in favor of South Dakota in South Dakota v. Wayfair remains a major victory for small businesses and Main Street South Dakota.
Yesterday (June 21, 2023) was the five-year anniversary of the Court’s 5-4 majority ruling in favor of South Dakota. The June 21, 2018, decision meant that states have the right to determine how to address out-of-state sellers of goods.
Jackley says it was his honor to stand before the U.S. Supreme Court representing South Dakotans. He says this case was about States’ Rights and fairness for Main Street business across our state and the nation.
In his remarks to the Supreme Court, Jackley argued that South Dakota was losing large amounts of sales tax revenue because of Congress’ inaction. He said the disparity resulted in local businesses being hurt by “an unlevel playing field.”
South Dakota’s case was supported by local, state and national organizations as well as 40 states, the District of Columbia, Puerto Rico and the Virgin Islands.
Jackley credits support from then-Governor Dennis Daugaard, legislators, the South Dakota Retailers Association, education leaders and others for helping to move the Wayfair case forward.
The court’s ruling can be found here: https://www.supremecourt.gov/opinions/17pdf/17-494_j4el.pdf.
JULY 17, 2018:
Now that the US Supreme Court has ruled in South Dakota’s favor in an online sales tax collection case, the case is coming back to South Dakota’s court system.
Gov. Dennis Daugaard says the two sides in the case are working out a deal.
Daugaard says he thinks the state is in a good position for negotiating a settlement on South Dakota’s online tax collection law.
Daugaard says the US Supreme Court also pointed out businesses have to meet certain thresholds before having to pay online sales taxes to South Dakota.
Daugaard says the state Supreme Court may take the case or it may remand the South Dakota vs. Overstock, Wayfair and Newegg case back to the Circuit Court for an examination of any factual questions that remain.
JUNE 26, 2018:
PIERRE, S.D. — Following the United States Supreme Court’s historic decision in South Dakota v. Wayfair, the South Dakota Department of Revenue is taking the next steps in implementing 2016’s remote seller taxation law.
“The U.S. Supreme Court’s June 21 decision was monumental for the State of South Dakota and Main Street businesses throughout the nation,” Department of Revenue Secretary Andy Gerlach said.
While the U.S. Supreme Court’s decision was in South Dakota’s favor, a State Circuit Court injunction prevents immediate implementation of a 2016 law which requires online sellers without a physical presence in South Dakota to collect and remit sales tax. Because the U.S. Supreme Court set aside the previous decision of the South Dakota Supreme Court, the case will return to the South Dakota court system for further legal proceedings.
The Department of Revenue expects that the U.S. Supreme Court will formally send its decision to the South Dakota Supreme Court in mid-July. The case will return to the State Circuit Court with the possibility for an August decision.
As the State of South Dakota prepares to implement the 2016 law, the Department of Revenue will continue to be a resource for both out-of-state and in-state businesses.
“The South Dakota Department of Revenue will work in partnership with the business community to ensure a smooth implementation of this decision,” Gerlach said. “While it may take several months for litigation to conclude, we will continue to communicate with our current and future taxpayers on implementation.”
The Department of Revenue will provide further updates on this topic online at sd.gov/remoteseller. Interested parties may also sign up to receive email updates at the webpage.
JUNE 21, 2018:
(AP) The US Supreme Court says states can force online shoppers to pay sales tax.
The 5-4 ruling in State of South Dakota v. Wayfair, Overstock and Newegg today is a win for states, who said they were losing out on billions of dollars annually under two decades-old Supreme Court decisions that impacted online sales tax collection.
The high court ruled Thursday to overturn those decisions. They had resulted in some companies not collecting sales tax on every online purchase. The cases the court overturned said that if a business was shipping a product to a state where it didn’t have a physical presence such as a warehouse or office, it didn’t have to collect the state’s sales tax. Customers were generally supposed to pay the tax to the state themselves if they don’t get charged it, but the vast majority didn’t.
South Dakota Attorney General Marty Jackley argued the case before the high court. “Today’s landmark decision is a win for South Dakota and for Main Street businesses across America that will now have a level playing field and tax fairness.”
In his opening remarks to the United States Supreme Court Justices, Attorney General Jackley argued:
“There are two very significant consequences brought about by Quill: First, our states are losing massive sales tax revenues that we need for education, healthcare, and infrastructure. Second, our small businesses on Main Street are being harmed because of the unlevel playing field created by Quill, where out-of-state remote sellers are given a price advantage.”
South Dakota passed a law in 2016 that would require out-of-state retailers to collect and remit sales tax similar to in-state retailers. The law applies to out-of-state retailers if they have more than $100,000 in sales or complete more than 200 transactions per year within South Dakota.
Given the controlling precedent of Quill, on October 2, 2017, the Attorney General’s Office filed a petition for certiorari asking the U.S. Supreme Court to review the South Dakota Supreme Court decision in State of South Dakota v. Wayfair, Overstock and Newegg.
In Quill, the U.S. Supreme Court required that a retailer have a “physical presence” within a state before a seller can be obligated to collect and remit that state’s sales taxes on purchases delivered into the state. None of this would be possible without the support of 41 Attorneys General, the President, the South Dakota Retailers Association, education leaders, and the business community.
