South Dakota

CSG Midwest
Two years ago, four public universities in South Dakota began offering in-state tuition to Iowa undergraduate students. In October, state officials announced that the plan had begun to pay off.
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In September, South Dakota lawmakers met in special session to finalize a policy change that Gov. Dennis Daugaard said was “50 years in the making.” He signed two bills that allow the state to act on its new legal authority to collect taxes from remote and online sales.

Under SB 1, which takes effect on Nov. 1, South Dakota will enforce sales tax collections from online retailers who have at least $100,000 in sales or 200 transactions a year. A second bill approved in the recent special session (SB 2) requires online marketplace providers such as Amazon to attain a sales tax license and remit sales taxes on behalf of sellers that use their services.

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In less than eight weeks, some Midwestern voters will be asked to decide more than just who will sit in which legislative seats. Depending on their location, they’ll be asked about redistricting, legalizing marijuana, ethics reform, Medicaid expansion, and more.
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Later this year, South Dakotans will vote on whether the state should have a higher bar for changing the Constitution. Under the proposal, placed on the ballot this year by the Legislature, constitutional amendments would require approval of 55 percent of the votes cast.
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For the fiscal year that began in July, Illinois assumed a revenue boost that it and most states have long been waiting to get on the books — tax collections from remote sales. The state’s assumption is $150 million, based on the nine months that those collections can begin after Illinois’ “economic nexus” law takes effect this fall. (Spread over the course of a full fiscal year, the estimate rises to $200 million.)
In the years ahead, this revenue source is expected to be part of budget estimates and collections in every Midwestern state, thanks to the U.S. Supreme Court’s June 21 decision in South Dakota v. Wayfair(unlike Illinois, most states did not include an increase from online sales tax collections in their FY 2019 estimates).
By a vote of 5-4, the justices overturned a 1992 ruling, Quill Corp. v. North Dakota, that had barred states and local governments from requiring vendors with no physical presence in the state to collect sales taxes. In the years since Quill, online transactions skyrocketed, calls among brick-and-mortar businesses for sales-tax fairness intensified, and multiple attempts at congressional action (always an alternative to a new court decision) failed.
“Hooray for South Dakota,” John Hicks, executive director of the National Association of State Budget Officers, said, noting the state’s passage of legislation in 2016 that became the basis for challenging, and eventually overturning, Quill.

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