SD Supreme Court strikes down sales tax on online purchases
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PIERRE (AP) — South Dakota’s Supreme Court on Thursday struck down a law that would require out-of-state retailers to collect sales taxes on in-state purchases — a defeat the state expected and welcomed in a case that eventually could have national implications for e-commerce.
Attorney General Marty Jackley hopes to persuade the U.S. Supreme Court to reconsider rulings issued mostly before the online shopping boom that exempt retailers from having to collect sales taxes in states where they have no physical presence. He said they give out-of-state online retailers an unfair competitive advantage over local retailers.
“Today’s decision paves the way to respectfully request the U.S. Supreme Court to provide that much needed fairness to save main streets and jobs across South Dakota,” Jackley said in a statement.
South Dakota has no income tax and depends heavily on sales taxes, and the state estimates it loses about $50 million in tax revenue annually to e-commerce. Jackley said the U.S. Supreme Court should particularly reconsider its 1992 ruling in a North Dakota case “in light of the extraordinary growth of the internet and the exponential technological advances that have been made in the last quarter century.”