*Red font in the legislation and regulation indicates changes from previous reporting

SOUTH DAKOTA - Potential Special Session to address sales tax increase and reduction mechanism

Issue:  Discussion surrounding Supreme Court decision in Wayfair vs. South Dakota case 

Affects:  Could affect those who sell/buy pool & spa related items 

Send comments to:  Jennifer Hatfield, jhatfield@apsp.org

Bill Summary: According to news reports, Governor Dennis Daugaard (R) has indicated that a special session of the legislature may be needed to address the Supreme Court’s decision in the Wayfair v. South Dakota case. The Governor’s Chief of Staff, Tony Venhuizen, reportedly stated in an email that a special session may be necessary in order to expedite the rulemaking process to allow for the collection of internet sales tax per the Supreme Court’s ruling in the Wayfair case. However, Venhuizen has cautioned that the special session is “not a certainty”.

Should the special session be held, one possible topic of debate will likely be how to address the sales tax increase and reduction mechanism passed as H.B. 1182 during the 2016 session. Provisions in the measure raised the state's sales tax rate from 4% to 4.5% and used the additional revenue for property tax relief and teacher salaries: an amendment by then-Representative Jeff Partridge (R) required the sales tax increase to be reduced by .1% for every $20 million generated in revenue from taxing remote sales. In a presentation to the Legislature’s Joint Committee on Appropriations, Venhuizen told lawmakers that if they plan to carry out the law as intended, certain provisions need to be clarified.

Status:  Special session date/time TBD. 

H.B. 1182: http://sdlegislature.gov/docs/legsession/2016/Bills/HB1182ENR.pdf