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Legislators prepare for Sept. 12 session on remote-sales tax

PIERRE — The Legislature's Executive Board received information Monday on the Sept. 12 special session Gov. Dennis Daugaard called.

The main purpose is to let state government proceed on taxing goods and services sold to South Dakota customers by many businesses that aren't within the state's borders.

The businesses are known as remote sellers. Many would have to begin remitting state sales and use tax starting Nov. 1 under the governor's plan. It builds on a law passed two years ago that Sen. Deb Peters, R-Hartford, sponsored.

The proceedings actually begin Sept. 11. The Legislature's Joint Committee on Appropriations plans a hearing at 2:30 p.m. on the various measures in the Capitol in room 414.

The special session starts at 10 a.m. CT Sept. 12. After organizational duties in their chambers, all 105 lawmakers would gather in a joint assembly in the House of Representatives to hear a speech from the governor.

The lawmakers would stay together in the House chamber and conduct a mass hearing as a committee of the whole.

Senators later would return to their side of the Capitol. The House and the Senate then would debate and vote on each bill.

There will be two on the remote-sellers tax and a separate one clarifying the date when elected state officials can take their oaths.

The special session follows the U.S. Supreme Court decision June 21. The justices voted 5-4 to uphold a state law that legislators passed in 2016.

The law requires a business to remit sales and use taxes if it sells more than $100,000 in a year or if it has more than 200 different transactions to South Dakota residents in a year.

One Daugaard bill would dissolve the state circuit court's injunction in the case. That would let state government collect from most businesses covered by the 2016 law.

The exceptions are companies in the lawsuit. They are Wayfair, Overstock.com and Newegg. They could continue to try other arguments in the lawsuit.

The second measure would force intermediary marketplaces such as Amazon and EBay to collect sales and use taxes from third-party sellers who use their sites.

Legislative leaders plan to talk either later this week or early next week about the special session plan, according to a presentation Sue Cichos made Monday to the Executive Board. She is deputy director of the Legislative Research Council that provides non-partisan professional services to lawmakers.

Supreme Court Justice Steven Zinter will swear-in the Senate while Chief Justice David Gilbertson swears-in the House of Representatives, Cichos said.

Needing to take oaths so they can serve the current term are governor's new appointees Scyller Borglum, R-Rapid City, and Rebecca Reimer, R-Chamberlain, to House seats and Margaret Sutton, R-Sioux Falls, to the Senate.

Rep. Mike Stevens, R-Yankton, asked where the legislation would start. "We don't have the bills yet," Cichos replied.

House Republican leader Lee Qualm of Platte said the decision hasn't been made. "We're remaining in discussion on some of this stuff," Qualm said.

At full power the House has 70 members and the Senate 35. House Speaker Mark Mickelson, R-Sioux Falls, said the nine representatives and nine senators on the appropriations panel would take testimony Sept. 11 and make recommendations.

Mickelson said the Legislature, meeting as a committee of the whole Sept. 12, probably would have state Revenue Secretary Andy Gerlach as the first witness.

Mickelson said Sen. Peters likely would testify about what she intended in 2016 when she sponsored the new law.

Daugaard, a Republican, didn't show any proposals Thursday during a discussion with top lawmakers from both parties, according to a memo Senate Republican leader Blake Curd of Sioux Falls sent to his caucus members.

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