Daugaard: Special Session Could Be To Remove Injunction For Online Sales Tax Law

Aug 6, 2018

Credit Yuharelly Comparan / SDPB

South Dakota Governor Dennis Daugaard says the legislature may need to overturn an injunction on collecting sales tax from online retailers following a recent US Supreme Court decision.

That automatic ban written into the state law is why the governor says a special session could be needed.

In June, the US Supreme Court overturned a ruling from South Dakota, which found that mandating  out-of-state vendors collect sales tax from online purchases was unconstitutional.

A provision in the bill the legislature passed in 2016 puts the law on pause if ever challenged in court.

However, Governor Daugaard says he wants the legislature to reconvene to remove that injunction so the state can start collecting tax – especially before the holiday season.

“By bringing the legislature in we could amend the statute to give the court flexibility to allow the tax to be collected—allow the injunction to be lifted—while the case makes its way to a final decision," Daugaard says. "I think that would take away the motivation of the opponents to drag this out unnecessarily.”

Daugaard says the state feels they have strong ground to return to the circuit court to say the law should be upheld.

The Attorney General’s office filed a motion for the state supreme court to reconsider its opinion. Wayfair attorneys have until Wednesday to respond.