South Dakota v. Wayfair, Inc.
The U.S. Supreme Court has agreed to hear the case South Dakota v. Wayfair, Inc. to consider freeing state and local governments to collect billions of dollars in sales taxes from online retailers. The Court has agreed to revisit a 26-year-old ruling that has made much of the internet a tax-free zone. Oral arguments are scheduled for April 2018 and a decision is expected by the end of the current term in June 2018. Heeding calls from traditional retailers and dozens of states, the justices said they’ll hear South Dakota’s contention that the 1992 ruling is obsolete in the e-commerce era and should be overturned.
South Dakota Senate Bill 106 requires remote sellers with no physical location in South Dakota to remit sales tax and follow all procedures of the law as if they have a presence in the state if they meet one of two criteria in the previous calendar year or the current calendar year.
- The remote seller’s gross revenue of sale of tangible property, any products transferred electronically, or services delivered into South Dakota exceeds $100,000
- The remote seller has 200 or more separate transactions tangible property, any products transferred electronically, or services delivered into South Dakota.
Pursuant to 2016 Senate Bill 106, the State of South Dakota filed a declaratory judgment action in the Sixth Judicial Circuit Court, Hughes County, South Dakota, Civil No. 32 Civ. 16-92, on April 28, 2016.
As a result of the filing, the automatic injunction of Section 3 of Senate Bill 106 now applies. Section 3 states: “The filing of the declaratory judgment action established in this Act by the state operates as an injunction during the pendency of the action, applicable to each state entity, prohibiting any state entity from enforcing the obligation in section 1 of this Act against any taxpayer who does not affirmatively consent or otherwise remit the sales tax on a voluntary basis.”
