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Governor's Column: A Win For States' Rights



          Office of Gov. Dennis Daugaard

500 E. Capitol Ave.

Pierre, S.D. 57501






FOR IMMEDIATE RELEASE:  Friday, June 22, 2018

CONTACT:  Tony Venhuizen or Kelsey Pritchard at 605-773-3212


EDITORS/NEWS DIRECTORS:  Please consider the following column from Gov. Dennis Daugaard. For an audio recording of the Governor’s weekly column, visit http://news.sd.gov/player.aspx.   



A Win For States’ Rights


A column by Gov. Dennis Daugaard:


It’s been a historic week for South Dakota. On Thursday, June 21, the United States Supreme Court announced its decision in South Dakota v. Wayfair, Inc., ruling in our favor 5-4.


The case stemmed from a bill I signed into law in 2016 which requires online sellers without a physical presence in South Dakota to collect and remit sales tax. The law applies to online sellers with more than $100,000 in South Dakota sales or 200 or more transactions. Several companies, including Amazon, began voluntarily to comply after the law’s passage, while others objected based on the Quill decision issued by the U.S. Supreme Court in 1992. 


Our State Supreme Court acted on the matter in September of 2017, affirming the circuit court’s ruling that the law was in direct conflict with Quill. Groups across the nation – including the National Governors Association, the Tax Foundation, the National Retail Federation and the American Farm Bureau Federation – joined South Dakota in urging the U.S. Supreme Court’s favorable consideration. Forty states signed Colorado’s “friend of the court” brief, along with two territories and the District of Columbia, supporting our position.


Those efforts were successful, as the U.S. Supreme Court this week announced its decision. The court overturned Quill, holding that “Quill has come to serve as a judicially created tax shelter”.


The state still has a few remaining procedural steps before the 2016 law can go into effect. The U.S. Supreme Court remanded the issue back to our state Supreme Court, which will need to compare our 2016 law to the new standard established by the June 21 decision. The U.S. Supreme Court, however, gave several indications that our 2016 law has sound protections in place, which increases the likelihood of a favorable decision from our state court.


This isn’t just our victory, but a win for states’ rights. Under this ruling, other states can take steps to collect tax from online sellers. And if other states already have a law in place or can pass legislation in short order, it’s possible they may actually have the ability to tax these sales before we do.


I thank Attorney General Marty Jackley, Sen. Deb Peters and her legislative colleagues, and the Department of Revenue for their efforts that led to this victory. South Dakota’s fight for tax fairness has gone on for 20 years, and over that time Gov. Bill Janklow, Gov. Mike Rounds, many state legislators, and our congressional delegation all have played important roles. South Dakota worked hard for this win. 


South Dakotans can be proud that our state led this charge. Now, finally, all businesses will compete on a level playing field.