Decision makes 'level playing field' for small businesses
Because the Supreme Court ruled in favor of South Dakota on Thursday morning, online retailers will now be responsible for paying state sales tax, just as businesses with a physical presence in the state already were already required to do.
Business owners in South Dakota were already subject to a 6 percent sales tax, and many area business owners feel that the Supreme Court's decision was justified.
Of those who supported the decision, some said they did so because they thought it might help small businesses such as their own be more competitive, while others thought it was just a matter of making things a little more fair.
Bonnie Kor, owner of Bonnie's DeKor in Mitchell, said she hopes holding online retailers to the same taxation standards as businesses with a physical presence in the state will make people more likely to buy locally more often.
"I feel strongly that there should be tax on Internet sales," Kor said. "I sure hope it makes a change for the better."
Kor said that in recent years, she's seen a drop in sales, and that often, people come into her store, find merchandise they like, check to see what company originally made it and then go home and buy it online, rather than purchasing it in the store. While she has maintained a following of some loyal customers that refuse to shop online, she hopes that the Supreme Court's decision will incentivize people to go back to shopping at local businesses where they can get personal services unavailable from online retailers.
Not all business owners are happy with the decision. Linda Schnabel, owner of the Parkston-based online retailer Rosanne's, said she would prefer that South Dakota do away with sales taxes entirely and instead generate revenue from income taxes.
"Sales tax penalizes those who make very little," Schnabel said.
Mitchell Area Development Corporation Executive Director Bryan Hisel also said he thinks the Court's decision will benefit local businesses.
"It places what I view as a level playing field for local merchants," he said, noting that the 6 percent sales tax South Dakota retailers have already had to charge had the potential to put those businesses at a severe disadvantage to online retailers who had not had to worry about sales tax until now. "It's a major win for South Dakota and, I think, for retailing."
Hisel said he encourages small businesses to become more competitive with large online retailers by selling their products online as well.
The Supreme Court said that the amount remanded to South Dakota will be between $48 million and $58 million annually.
"I've never been so proud, as attorney general, to stand before our nation's highest court and represent the people of South Dakota for something so important as helping to protect our Main Street businesses," South Dakota Attorney General Marty Jackley said.
William Roth, owner of Salem Community Drug, said he didn't anticipate much of an impact on his own business and the amount of retail sales that are made there, but he's still happy with the Court's decision and believes the increase in sales tax revenue will be beneficial for South Dakota. For Roth, sales tax is "just part of business."