OUR VIEW: Sales tax owed on online purchasesThe lack of sales tax gives online, non-South Dakota businesses a distinct sales advantage over South Dakota businesses that are selling the same product. It also puts a crimp in state coffers.
By: Editorial board, The Daily Republic
A recent national survey gave some interesting background to an ongoing problem that threatens America’s main streets.
The survey of 1,007 people showed that 61 percent of respondents understand they are required to pay any uncollected sales taxes from online purchases.
The problem? Not everybody does it.
Just to review, South Dakotans who make online purchases are still required to pay sales tax, even if the online company didn’t require it during the transaction. It’s a little-known process, but it is the law, although we suspect few people actually follow it.
It may not seem like a big deal but it is, since the lack of sales tax gives online, non-South Dakota businesses a distinct sales advantage over South Dakota businesses that are selling the same product. It also puts a crimp in state coffers.
The Daily Republic reported Tuesday that South Dakota loses an estimated $48 million annually in unpaid online sales taxes. That figure came via the state’s Business Tax Division, which cited a University of Tennessee study.
Last summer, we opined on this very subject. We lamented the competitive disadvantage that faces in-state, brick-and-mortar businesses and called for changes in law that would require online companies to begin collecting sales taxes.
Talk of such legislation still circulates, and we hope something can still be done.
South Dakotans must realize the importance of such proposals and also must realize that if enacted, their lives really shouldn’t change much. After all, we’re already required to pay sales tax for our online purchases, even if we’re not actually doing it.
Nobody wants Main Street South Dakota to fail. The least we can do is put Amazon.com on the same competitive level as our uptown businesses.