South Dakota Court Strikes Down Economic Nexus Law

Friday, March 10th, 2017

 
 
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South Dakota
General

A South Dakota circuit court recently ruled against a law seeking to extend the reach of the state's sales tax. The law required out-of-state sellers meeting certain requirements to collect and remit sales tax.

As written, the law required out-of-state sellers to collect and remit sales tax if the sellers (1) made sales of $100,000 or more in South Dakota or (2) made 200 or more separate transactions in South Dakota.

The ruling against this law relies on a United States Supreme Court case known as Quill. According to Quill, a state may only require a seller to collect and remit sales tax if the seller has a physical presence in the state.

According to ruling, the requirements set forth in the law violate the physical presence requirement of Quill. The court therefore struck down the law. The state plans to appeal this ruling to the South Dakota Supreme Court.

href="http://dor.sd.gov/Taxes/Business_Taxes/SB106.aspx


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TTR has a website that companies subscribe to and use daily. This website provides a list of everything that can be bought or sold in the U.S. It provides simple answers to whether buying or selling these items is taxable (subject to a sales tax or other tax), and it provides all the legal authority to support these tax answers.

TTR likes to keep things simple and fun, which is why it has great people who provide help to clients on any support questions they have about transaction tax issues.

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