Ambiguities exist in South Dakota’s remote sellers’ statute, which allows the state to collect revenue from online retailers.
That’s according to the officials with the Legislative Research Council, who presented to the legislature’s executive board. They say it’s uncertain how to implement the law.
It’s almost been a full year since the state started collecting revenue from online remote sellers.
The law as currently written says IF the state collects more than 20 million dollars of additional revenue from online sellers, the state sales tax will reduce by .1 percent. This is known as the Partridge Amendment.
It appears lawmakers will take up the issue this session, because, as the LRC’s fiscal and program analyst Jeff Mehlhaff says…
“If you’re looking at it on a year over year basis, ’18 to ’19 is projected to be more than a $20 million increase.”
But state law is silent as to how the $20 million dollars is determined.
What is also unclear is how the state defines “additional net revenue” as consumers buying habits shift from the storefront to the internet. Some lawmakers question whether that’s new revenue.
State Senator Brock Greenfield says legislators have a lot to figure out.
“We’re going to have a huge, huge debate ahead of us,” Greenfield says. “The more we think about this the more we understand that we don’t exactly understand what we’re dealing with.”
The Partridge Amendment also does not include a mechanism for notifying the public of a sales tax reduction.