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MERCER: Every penny in sales tax is essential for our future

PIERRE -- We're trying to follow a harsh new rule in our house this Christmas. No purchases over the internet, at least not if the company doesn't collect South Dakota sales taxes. This would seem to violate a rule of nature. No one in my circle ...

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PIERRE - We're trying to follow a harsh new rule in our house this Christmas.

No purchases over the internet, at least not if the company doesn't collect South Dakota sales taxes.

This would seem to violate a rule of nature. No one in my circle goes looking for more taxes to pay.

But it's not fair to South Dakota businesses that they're typically at a 4.5 percent disadvantage against internet competitors when state sales tax is added.

The disadvantage worsens when municipal sales taxes are added.

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These are the very businesses that help pay, through their advertising, for this newspaper to publish.

These are the same businesses that pay property taxes, at a steeper rate than any farmer or rancher, or that homeowners pay on the houses where they live.

The property taxes collected from businesses are a very big part of how we pay for public schools in South Dakota, and for plowing our local streets and our county roads, and for many of our other many city and county services.

South Dakota's policymakers at the state level are trying to collect sales taxes on internet purchases from companies that don't have a physical presence in our state.

Sen. Deb Peters, R-Hartford, led the Legislature earlier this year into provoking a fight in federal court over taxing purchases made via the Internet.

The legislators and Gov. Dennis Daugaard, just like hundreds of legislators and several governors before them, have been blocked by the U.S. Supreme Court from imposing sales taxes on goods bought through the internet and catalogs.

The nation's highest court ruled in the 1992 Quill Corp. v. North Dakota decision that companies must have a physical presence in a state to be subject to the state's taxes.

South Dakota now is engaged in federal court with several companies from outside the state on that very issue. We would be years away from a final decision. The intent is to force the fight back into the U.S. Supreme Court.

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There wasn't much in the way of internet commerce back in 1992.

In his budget speech Tuesday, the governor said internet purchases are noticeably hurting sales tax collections in South Dakota.

State sales tax is the largest source of revenue for state government and for the aid it provides for local citizens, from helping support public schools to delivering Medicaid assistance to the needy.

Daugaard said companies outside South Dakota voluntarily remitted about $4 million in sales taxes to our state treasury during the past year. That's not even one percent of total sales-tax revenue.

Yet our sales-tax collections from South Dakota businesses have grown slower than normal for much of the past decade and fell about $20 million below projections for July through October this year.

That would equate to a $60 million impact carried across a full 12 months if that trend continued. The $4 million isn't much in comparison.

The decision is up to us where we buy. Empty storefronts send horrible messages in our communities. We hurt our newspapers when we don't support local advertisers and then you and I can't be informed as well.

Ultimately, we hurt ourselves.

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