South Dakota Court Decision Tees Up Supreme Court Case on Internet Sales Tax

By:
Chris Gaetano
Published Date:
Sep 15, 2017
InternetTax

The South Dakota Supreme Court ruled against a law that compelled online retailers to collect sales tax, a move that lines the case up for possible review by the U.S. Supreme Court, according to Bloomberg. The court supported the appeal of a previous decision that said online retailers must collect a 4.5 percent sales tax. The court said the previous ruling contradicted Quill Corp. v. North Dakota, which determined that retailers without a physical presence in the state cannot be compelled to collect sales tax. That case was decided, though, in 1992 and a lot of things have changed since then. Bloomberg said that Justice Anthony Kennedy himself has suggested the decision should be revisited. 

While the courts sided with the online retailers, the South Dakota Attorney General said he was pleased with the decision, according to USA Today. He said he has already begun to reach out to a bipartisan group of attorneys general to strengthen his state's case to the U.S. Supreme Court. The Argus Leader, a South Dakota-based paper, said in fact that the state wanted a quick loss so they could take the matter to the Supreme Court. 

The Council of State Governments, an organization led by state governors, said in a recent newsletter that the way South Dakota structured its law indicates that it was meant to be fast-tracked for U.S. Supreme Court review. It said that, first, the law requires that the circuit court act on the state's declaratory judgment "as expeditiously as possible." Second, any appeal must only be made to the South Dakota Supreme Court, which was also required to hear the case "as expeditiously as possible." 

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