BISMARCK, N.D. (AP) - A U.S. Supreme Court decision Thursday that states can force online shoppers to pay sales tax is being hailed by North Dakota officials as a victory for local businesses, and Tax Commissioner Ryan Rauschenberger said his office will be working quickly to implement the law change.
The Supreme Court ruling in a 2016 South Dakota case overturns a 1992 decision, Quill Corp. v. North Dakota, that said companies cannot be forced to collect sales tax from customers in a state where they don’t have a physical presence like a store or distribution center.
U.S. Sen. Heidi Heitkamp was North Dakota’s tax commissioner when the state lost the Quill case, which dealt with catalog retailers. She applauded the Supreme Court’s action Thursday, calling it “a huge victory decades in the making for our brick-and-mortar businesses.”
Gov. Doug Burgum echoed that statement, calling the decision “a long overdue victory.”
North Dakota Retail Association President Mike Rud has been lobbying to change the law for a decade.
“We were hoping one way or another it would be overturned, either by the Supreme Court or Congress,” he said. “We’re very excited to see what the Supreme Court did.”
The North Dakota Legislature last year passed a law requiring the collection of sales tax from online retailers, effective whenever the U.S. Supreme Court acted to overturn the Quill decision or made a similar ruling, according to Attorney General Wayne Stenehjem, who joined with South Dakota in pushing to overturn the Supreme Court’s 1992 decision. He said he will work with Rauschenberger to implement the change.
That will happen “over the next few weeks,” Rauschenberger said.
“This will go a long way to ensure local businesses are on a level playing field with online retailers,” he said.
North Dakota loses out on an estimated $50 million a year in sales tax that currently doesn’t get collected by out-of-state sellers, according to tax department spokeswoman Jen Raab.
Remote sellers will be required to collect and remit sales tax to North Dakota if they make a minimum of either 200 sales or $100,000 in sales per year in the state, according to Rauschenberger.
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