Gov. Daugaard Signs Special Session Bills

The South Dakota legislature held a special one day session with the main goal of clearing any legal obstacles to the state collecting sales tax collected by certain online businesses.

Proponents of the two bills say the state is missing out on valuable tax revenues that can go into the state’s general fund to support state government programs and eventually lower taxes for everyone.  Opponents believe it’s another tax hike on South Dakotans.

Senate Bill 1 revises the language of the 2016 law relating to the imposition of an injunction against collection of sales tax on remote sales, now that the U.S. Supreme Court has ruled in favor of South Dakota. The change will allow the state to begin collecting sales tax from remote sellers who meet the $100,000 in sales or 200 transaction threshold beginning on Nov. 1, 2018. Wayfair litigants are exempt under the proposal, leaving the court system to resolve the matter.  Legislators also considered this bill with an emergency clause so it could go into effective immediately after the governor signed it into law.

 Senate Bill 2 requires marketplace providers to attain a sales tax license and remit sales tax on behalf of sellers utilizing their services. This applies to prominent websites that serve as a platform for third party sellers.  There was not an emergency clause attached to SB2.

 Legislators also considered a change in state law unrelated to the online sales tax proposals. House Bill 1001, clarifies the timing of the inauguration of the new governor in 2019. Current law says that state officials cannot be sworn in until the first Monday of January, which calls into question the legality of the scheduled inauguration ceremony on Jan. 5. The bill amends the law so that the inauguration can always be held on the Saturday before the State Legislature convenes.  

All three bills passed overwhelmingly and the governor signed them into law immediately after the session concluded today.

(SDBA)