In an effort to fast-track implementing their economic nexus rules, South Dakota’s governor, Dennis Daugaard, has approved a special legislative session. This is set to take place on September 12th. After the monumental decision in the Wayfair Supreme Court case, South Dakota is still prevented from enforcing their economic nexus standard because of a Circuit Court injunction. The special legislative session is intended to produce a bill to eliminate the injunction and allow South Dakota to enforce the new nexus rules more quickly. Daugaard’s stated goal is to begin enforcement on October 1st of this year.
South Dakota’s current economic nexus regime subjects out-of-state sellers to sales tax collection and filing if they exceed either $100,000 in in-state sales, or 200 transactions. Many other States have adopted “copycat” economic nexus rules. After the pivotal Wayfair case, many of these other States are fast-tracking implementation and will begin enforcement on October 1st. Given South Dakota’s Circuit Court injunction, the State has additional procedural hurdles to overcome to begin implementation. The goal of the special session is to overcome these hurdles to join other States in the October 1st implementation date.
The Barnes Dennig team will continue to monitor these developments and keep you informed as further guidance becomes available. If you have any questions about the status of South Dakota’s sales tax law, or other States’ nexus rules after the historic Wayfair decision, we would love to discuss these issues with you, as well as how they may impact your business.
Please contact a member of Barnes Dennig’s State and Local Tax team if you have any questions about South Dakota’s new rules or any other related state and local tax matters.