Jackley: ‘SD led the way for nation to bring tax fairness’

June 23, 2018

SPEARFISH — Attorney General Marty Jackley and his staff were tuned into the SCOUTSblog Thursday morning to see if the Supreme Court would rule on State of South Dakota v. Wayfair, Overstock and Newegg.

SCOUTSblog is a blog written by attorney’s who closely follow the U.S. Supreme Court, and State of South Dakota v. Wayfair, Overstock and Newegg, argued in April by Jackley, overturns a 1992 decision, Quill Corp. v. North Dakota, that said companies cannot be forced to collect sales tax from customers in a state where they don’t have a physical presence like a store or distribution center.

The Supreme Court now says states can force online shoppers to pay sales tax.

“I couldn’t be better and prouder,” Jackley told the Pioneer Thursday after hearing the landmark decision. “It felt really good. Obviously this was a big win for South Dakota. This is something I felt strongly would, not only help South Dakota, but also Main Street businesses across America.”

He said the ruling evens the playing field with large, out-of-state companies.

To give even playing field to large out of state companies.

South Dakota lawmakers in 2016 increased the state’s sales tax rate from 4 percent to 4.5 percent, but required the increase to be rolled back if the state could ever collect from out-of-state online retailers.

Two years later, that’s on the horizon. Republican state lawmaker Jeff Partridge, who sponsored the provision in the teacher pay measure, said he’s looking forward to the “prospect of a tax cut for the citizens of South Dakota.”

The law calls for a .1 percent rate cut per $20 million in new state revenue from purchases through online retailers. South Dakota has estimated it loses about $50 million annually to e-commerce.

Forty-one other attorney generals signed onto State of South Dakota v. Wayfair, Overstock and Newegg. In April, Jackley and Noel Francisco, the U.S. solicitor general as well as opposing counsel argued the merits of the case.

Jackley said arguing before the U.S. Supreme Court is a lawyer’s dream.

“And that dream came true. What made it extra special is that I was there for South Dakota,” he said.

“The main two goals were to convey to nine justices in Washington, D.C., what this really meant to real people and those Main Street businesses, and intertwine that into the law and why there needed to be a change,” Jackley said. “I thought that was well received. There were strong exchanges back and forth, and I felt strongly optimistic during and after the argument.”

Jackley said that the opposing counsel argued that Congress needed to change the law.

“We knew all along that Congress was going to be an issue, and when you look at the dissent, that was one of their main points,” he said. “We always felt that existed, but we had a strong argument to overcome that. They had their time to act and real businesses and people are being hurt by a federal law that simply is outdated.”

The law applies to online sellers with more than $100,000 in South Dakota sales or 200 or more transactions annually.

According to the Supreme Court’s ruling, the state misses out on $48 million to $58 million annually in missed sales tax from online sales. South Dakota relies on sales tax for much of its revenue — about 60 percent.

Jackley, who is serving his second and final term as attorney general said he hasn’t decided on plans when his term expires in January.

Jackley recently campaigned for governor, losing to U.S. Rep. Kristi Noem in the republican primary.

He plans to sit down with his family to make the decision. However, he said he has no immediate plans to return to politics.

“Public service has been very good for me,” he said. “I’ve been U.S. attorney, attorney general, and I have no regrets running for governor.”

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