Two South Dakota sales and use tax bills have been introduced in response to the U.S. Supreme Court’s decision in Wayfair. The bills, if enacted, would affect remote sellers and marketplace providers.
Gov. Dennis Daugaard submitted both bills, and they will be considered during the special legislative session on September 12, 2018.
Remote sellers who meet the $100,000 in sales or 200 transaction annual threshold would be required to collect sales tax starting on November 1, 2018.
The Wayfair litigants would be excluded from this new deadline to collect. Those litigants’ tax collection requirements would still be determined by the courts as their case moves through the system.
Marketplace providers would be required to get a sales tax license and collect and remit sales tax on behalf of sellers using their services. The proposed legislation would apply to websites that serve as a platform for third party sellers and meet certain threshold requirements. Examples of marketplace providers are Amazon and eBay.
The license and collection requirements would take effect on March 1, 2019.
South Dakota v. Wayfair Inc. Decision
In South Dakota v. Wayfair Inc., U.S. Supreme Court, Dkt. 17-494, June 21, 2018, the U.S. Supreme Court held that physical presence is no longer required to establish sales and use tax nexus.
S.B. 1 and S.B. 2, submitted to South Dakota Senate on August 30, 2018; News Release, Office of Gov. Dennis Daugaard, August 30, 2018
Learn about the decision in South Dakota v. Wayfair and get CPE Credit at Quill Overturned: Understanding State Tax Issues.