South Dakota has a nearly $34 million budget shortfall and one of the reasons is lost sales tax revenue to online retailers.
According the state, it loses $50 million in revenue to e-commerce every year.
KELOLAND Investigates has an update on South Dakota's efforts to collect sales tax from those companies.
Since the state doesn't have an income tax, it relies heavily on sales taxes to fund government.
But it has been losing money to online retailers, because sales tax was never collected from them.
However, the state passed a new law that went into effect on May 1, 2016 requiring online retailers with revenues of more than $100,000 a year or 200 transactions in South Dakota to pay the state sales tax.
But the governor says some retailers have refused to pay the tax.
Wayfair, Overstock and Newegg sued the state and the South Dakota Supreme Court ruled the state cannot force Internet retailers to collect sales tax.
Now the state is appealing that decision to the U.S. Supreme Court.
But since the law passed in 2016 many retailers have been paying sales tax.
South Dakota's Department of Revenue sent out a letter informing retailers they needed to get a sales tax license.
160 retailers around the country applied and 105 of those are active. They've paid $2,016,816 in sales tax to the state.
Now that number does not include online retail giant Amazon.
We asked the state why. We were told that's because Amazon didn't get a sales tax license as result of the letter sent out to retailers about the new law.
But the South Dakota Department of Revenue tells me Amazon does have a sales tax license. However, because of taxpayer confidentiality laws, the state says it can't tell us how much it’s collected from Amazon in sales tax.
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