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SD governor calls special session over online sales tax law

August 7, 2018

PIERRE, S.D. (AP) — Gov. Dennis Daugaard is calling a special legislative session to speed up implementation of a U.S. Supreme Court ruling allowing states to force online shoppers to pay sales tax, the governor’s office said Tuesday.

The special session will be Sept. 12 at the state Capitol. The move comes after the June high court ruling in South Dakota’s favor that opened the door for consumers to see sales tax on more online purchases from out-of-state companies.

“South Dakota led the fight for tax fairness, which culminated with our historic win before the U.S. Supreme Court in June,” Daugaard said in the Tuesday statement. “Thanks to that victory, other states are implementing tax changes as soon as Oct. 1, and I will be proposing legislation to allow South Dakota to join them.”

The state Department of Revenue is preparing draft legislation in consultation with the Attorney General’s office that will be available for review before the special session.

Daugaard said prior to announcing the special session that one topic for lawmakers to consider would be removing a barrier to enforcing South Dakota’s requirement that many out-of-state internet retailers collect sales taxes. South Dakota currently can’t collect because of an injunction in place under state law until state-level legal proceedings end.

Daugaard has said he would seek to give the courts flexibility to remove the injunction. Another topic of the special session will be creating a license for websites such as eBay that provide marketplaces for other merchants to collect sales taxes for the retailers that use their platforms.

But the governor has said the special session won’t address a provision in state law that requires a 2016 sales tax hike for teacher pay be scaled back if the state is able to collect tax on the online purchases.

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