Undated (KELO-AM) Two trade associations have filed suit against the State of South Dakota over its new internet tax mandate that takes effect May 1.
The American Catalog Mailers Association and NetChoice claim that the mandate is an unconstitutional expansion of state taxing powers, and conflicts with Supreme Court precedent.
The mandate requires that companies, based out-of-state, that do over $100,000 in online business inside South Dakota, must collect sales tax and pass it on to Pierre.
The suit cites a 1992 U.S. Supreme Court decision that seemed to conclude that the states do not have the right to collect sales tax from companies based out-of-state.
The lawsuit was filed in South Dakota's 6th Judicial Circuit Court against South Dakota State Department of Revenue Secretary Andy Gerlach.
The South Dakota Retailers Association strongly supports the new mandate. Executive Director Shawn Lyons says his members must add the sales tax, so it's like competing with one arm tied behind the back against online sellers.
