U.S. Congress address impact of South Dakota vs Wayfair case impacting online sales tax

PIERRE, S.D.(DRGNews)- In their June 2018 “South Dakota v. Wayfair, Overstock and Newegg” decision, United States Supreme Court Justices determined states can require certain online sellers to collect and remit sales tax.

Six years later, a spokesperson for a national taxpayer group is advocating for some changes to be made to the nation’s online sales tax collection rules….while the man who argued the case to the Supreme Court to get those rules in place hopes Congress doesn’t get involved.

National Taxpayers Union Foundation Executive Vice President Joe Bishop-Henchman spoke to the U.S. Senate Finance Committee’s Subcommittee on Fiscal Responsibility and Economic Growth last week. He said it may have been a 5-4 vote, but all nine Justices agreed on at least one thing.

Marty Jackley was South Dakota’s Attorney General in 2018 and was reelected to that same position in 2022. He’s hoping Congress stays out of it.

Bishop-Henchman said in the past six years, only 24 states have joined the Streamlined Sales and Use Tax Agreement group.

Prior to the Wayfair decision, sellers had to have a building– or “physical presence”– in a state before they could be obligated to collect and remit sales tax. Jackley said that stipulation put local Main Street businesses at a disadvantage.

Bishop-Henchman said state economies had been doing well, which didn’t give them incentive to track down non-compliant online sellers to collect sales tax. But, he says, the financial landscape in the U.S. has changed, which might prompt state revenue departments to take another look at online sales tax revenue.

Jackley said the Wayfair ruling was a win for states who said they were losing out on billions of dollars annually.

South Dakota’s online sales tax collection law, passed a law in 2016, 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.