South Dakota losing revenue from non-existent online sales tax - KOTA Territory News

South Dakota losing revenue from non-existent online sales tax

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Tens of thousands of South Dakotans are shopping online on Cyber Monday, but how many will be paying a sales tax on those items?
 
Unless the online vendor is licensed in the state of South Dakota chances are, not many.

And the fact that many Internet transactions are not taxed has local businesses crying foul.
 
"It does undercut the small businesses here locally, as far as the use tax, and people saying what they bought online, to be honest I don't think they can really keep track of what people bought online," says the Owner of Global Market, Barb Schrader.
 
Last year to try to even the playing field and regain lost revenue, the state enacted a law that requires out of state retailers to notify South Dakota customers of that tax on their online purchase.

The use tax requires South Dakotans to voluntarily pay those taxes, but it's nearly impossible to enforce.

So, South Dakota mostly misses out on the revenue.

"Right now, South Dakota is missing out on around$ 50 to $60 million dollars a year on revenue that could go to schools, go to Medicaid, a variety of purposes that we really need to have covered by revenue," says Senator Bruce Rampelberg.
 
Of South Dakota's more than $1.2 billion in revenue, $770 million of that is from the state sales tax.

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