South Dakota to Start Collecting Online Sales Taxes in Fall

PIERRE, S.D. (AP) — South Dakota will start collecting sales taxes from many out-of-state online retailers this fall under a law signed Wednesday after a special legislative session.

Lawmakers gathered at the state Capitol for the special session and overwhelmingly approved Gov. Dennis Daugaard's legislation, which will allow the collections to start Nov. 1. A second measure that passed will require marketplaces that handle payments, such as eBay, to collect sales taxes for sellers on their platforms.

Daugaard later signed the measures into law. Before the votes, he urged legislators to support the measures, which he said were the "culmination of the decades-long fight South Dakota has led for tax fairness."

It was a South Dakota case that led to the U.S. Supreme Court's decision in June to overturn two decades-old high court decisions that made it tougher for states to collect sales taxes for certain purchases online. Daugaard said that a lot has changed since the Supreme Court's 1992 ruling that retailers had to have a physical presence in a state before officials could make them collect sales tax.

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