South Dakota ruling may boost Georgia online tax push


A state Supreme Court ruling Thursday in South Dakota may prove a boost to Georgia’s efforts to get all retailers to collect sales taxes when they sell products online.

South Dakota officials were hoping for a quick ruling in their state Supreme Court on legislation requiring internet companies to remit sales taxes. The bill was passed as a legal challenge to a 25-year-old U.S. Supreme Court decision that forbids states from requiring retailers without a physical presence in the state to collect sales taxes.

The South Dakota court ruled against the state law Thursday, setting up an appeal to the U.S. Supreme Court. Advocates for in-store retailers say the decision opens the door for the U.S. Supreme Court to reconsider its earlier ruling, which predated modern e-commerce.

Officials in many states have been looking to the U.S. Supreme Court to reconsider the issue.

That includes lawmakers in Georgia, where the state House this year passed legislation that would force online retailers with at least $250,000 or 200 sales a year in the state to either collect and remit sales taxes on purchases or send “tax due” notices each year to customers who spend at least $500 on their site.

Copies of the notices would go to the state Department of Revenue so it would know who owes at least some of the taxes. The proposal stalled in the Georgia Senate. Legislation has a two-year shelf life in Georgia, so it remains alive for the 2018 session.

“This is not a new tax, it is a mechanism to collect an existing tax,” state House Ways and Means Chairman Jay Powell, R-Camilla, said when he was pushing the bill earlier this year. “The tax is already owed.”

Some online retailers, such as Amazon.com, agreed to collect sales taxes after some prodding by the state.

If the General Assembly passes a bill during the 2018 session and the U.S. Supreme Court rules in favor of South Dakota’s measure, it could mean big money for state and local governments.

A state fiscal analysis suggested collecting those taxes could mean an extra $274 million in revenue for the state and $200 million for local governments. The combined figure could hit $621 million by 2022.

Owners of retail stores — who have a lot of political clout at the Capitol — have long said they are handicapped by the fact that they have to charge state and local sales taxes on what their customers buy while many online businesses don’t. But online retail trade groups say the Georgia proposal raises privacy concerns if retailers have to report sales they make to the Department of Revenue.


Reader Comments ...

Next Up in Georgia Politics

Move for freer political speech divides Georgia’s religious community
Move for freer political speech divides Georgia’s religious community

It’s a regular ritual on Sundays before big votes: Candidates fan out to churches across the state, take prominent perches near the pulpit and receive warm applause from parishioners. And preachers inevitably shower them with kind words, though they stop short of much more lest they cross an invisible line. That’s exactly what happened...
Group blames low EPD funding for Georgia’s water pollution problems
Group blames low EPD funding for Georgia’s water pollution problems

Members of a group of clean water advocates said the General Assembly’s failure to fully fund the Environmental Protection Division is a recurring theme of the organization’s annual list of problematic waterways and policies. Joe Moore, a member of the Georgia Water Coalition, said the Legislature harms the state’s waterways when...
Georgia’s craft brewers would win big in Senate tax bill
Georgia’s craft brewers would win big in Senate tax bill

The U.S. Senate’s new tax bill would give Georgia’s small craft breweries some holiday cheer months after a watershed state law provided a major economic boon to beer makers and liquor distillers. The would-be Christmas present comes in the form of a proposed tax decrease, which industry advocates say would put thousands of dollars into...
Governor to consider vast new changes to Georgia’s judiciary
Governor to consider vast new changes to Georgia’s judiciary

A panel created by Gov. Nathan Deal recommended a range of options to counter a landmark Georgia Supreme Court ruling that effectively bars residents from suing the state when trying to overturn a law they believe is unconstitutional. The findings submitted to Deal on Tuesday by the Court Reform Council also suggested the creation of a statewide...
Paper ballots pass Election Day test in Georgia
Paper ballots pass Election Day test in Georgia

The results are in from this month’s test run of a voting system that could bring paper ballots back to Georgia: It was easy to use and fast, but it would come with a high cost to taxpayers. The trial of the touch screen-plus-paper ballot voting system “came off without a hitch” when it was tried during the Nov. 7 election...
More Stories