Sales tax windfall should benefit state
South Dakota had a problem.
More and more people were buying their clothes, electronics and even groceries online.
Because some of those companies didn’t have a physical location in our state, taxes weren’t being collected on those goods and state government’s coffers were getting squeezed.
But it was that same state government that came up with a grand solution to fight back — ultimately all the way to the U.S. Supreme Court — against some big and powerful names.
The Supreme Court ruled in favor of South Dakota recently, saying it can force companies to collect and remit sales tax for customers in South Dakota even if that company doesn’t have a physical location in our state.
Let that sink in. Something that started in our tiny state legislature and was fought for by our Attorney General Marty Jackley will soon change the way everyone in America shops. Though Wayfair was on all of the court documents, it was online retailers as a whole who fought the state and this change to the law.
If this doesn’t help restore some faith that government can actually accomplish things, we’re not sure what will.
What’s better, the Supreme Court showed this wasn’t a liberal or conservative issue. Justice Ruth Bader Ginsburg — who is part of the court’s liberal wing — joined four of the more conservative justices in the affirmation while Chief Justice John Roberts — a conservative — joined the more liberal judges in the dissenting opinion. It’s a refreshing reprieve in these ultra-polarized times.
Before the Supreme Court ruling, South Dakota estimated that it was missing out on roughly $50 million a year in sales tax on internet purchases.
That’s a lot of dough, but who’s going to pay this new tax? The consumers. (All of us for those of you following along at home.)
Companies will simply need to collect the tax from you, the consumer, during your online checkout and then send that money to the state. While some consumers may view this as major downer, we see it as an opportunity for our state.
As a good faith gesture to the consumers of South Dakota, we ask that the state legislature look at creating a fund where these new online sales tax dollars can flow into.
Send a message to every South Dakota consumer that this new money, or at least part of it, will be put to a very specific good use. Show us that not only can little old South Dakota change something on a national scale, but we also know how to handle that success.
There is a litany of pressing issues facing our state and that new money could make a huge dent in some of them. By setting aside these tax dollars, the people of South Dakota could take solace in the fact that — what is ostensibly a new tax for most — will be used for an important South Dakota issue.
That new T-shirt can help pay for a mental health facility. Those new shoes can lower the cost of college for our children. A bright blue new sofa from Wayfair could give critical job training to someone in need.
We ask this of our state government. Pick a topic of need to focus on, set the money aside, and let’s solve another problem in South Dakota.
