In the never-ending search for new revenues to fill state coffers, South Dakota has approved a troubling new tax law. The law is in direct defiance of the Supreme Court and settled case law, and what’s more, the Mount Rushmore State knows it’s unconstitutional.
The law requires small- and medium-sized businesses that have no physical presence to collect sales taxes from their South Dakota-based customers. The state’s target? Remote sellers from around the country that aim to provide goods to residents via catalog or online. What’s worse, South Dakota has sued several such businesses and put them in legal jeopardy. This is nothing more than legislative and legal bullying – “pay up or we will sue you.”