South Dakota will start collecting online sales taxes in November

South Dakota, the state that pushed legislation and ultimately litigation to the U.S. Supreme Court, will start collecting sales taxes from many out-of-state online retailers on November 1 under a law signed Wednesday after a special legislative session.

Lawmakers approved Gov. Dennis Daugaard's legislation, and a second measure to require marketplaces that handle payments, such as eBay, to collect sales taxes for sellers on their platforms. Daugaard later signed both measures into law. ICSC is pleased with both of these developments.

South Dakota v. Wayfair led to the U.S. Supreme Court's decision in June overturning a physical presence standard that had limited the collection of sales taxes from online seller and catalogue sellers for more than two decades.

Many states are now poised to move forward. There are 45 states with a sales tax (Alaska, Delaware, Montana, New Hampshire and Oregon do not collect).  It is important to note that the status of states will continue to evolve as the implementation process moves through legislative and regulatory frameworks in each state. Numerous states have an implementation date of October 1, 2018 for collection and remittance. The situation is fluid and ICSC will keep you updated on an ongoing basis.

• Connecticut, Georgia, Hawaii, Indiana, Iowa, Kentucky, Maine, North Dakota, Utah and Vermont are fully prepared for sales tax collection from remote sellers. 
• New Jersey’s governor has asked the legislature to make technical changes and resubmit an e-fairness bill to him this fall. Ohio and Wyoming have pending court cases that may be dismissed in light of the Wayfair decision.
• Numerous other states either have regulations in place or are finalizing them and are split on whether they also need to codify those rules in legislation. Examples are Alabama, Idaho, Illinois, Maryland, Michigan, Mississippi, Nevada, New York, North Carolina, South Carolina, Tennessee and Wisconsin.
• Those jurisdictions starting from scratch with legislation are Arizona, Arkansas, Florida, Kansas, Missouri, New Mexico, Texas, Virginia, West Virginia; those likely needing to improve their current regulatory or legislative approach are California, Colorado, Massachusetts, Minnesota, Nebraska, Ohio, Oklahoma, Pennsylvania, Rhode Island, Washington. Legislation is expected in 2019 in all these states.