Online sales tax revenue received more attention during the second week of legislative session.
One of the first questions asked of Sec. Gerlach was about the recently announced deal between South Dakota and Amazon, which will have the online retailer begin collecting and remitting sales tax on online purchases for the state.
“Knowing that long term it’s (the agreement) going to pay off…I would urge the legislature to be conservative (in initial expectations),” Sec. Gerlach told committee members, adding that collection by Amazon will legally take effect in February.
“We’ll see the first returns from Amazon at the end of March,” Sec. Gerlach said, noting that South Dakota would receive “approximately five months’ worth of Amazon returns.”
Sec. Gerlach noted one of the factors in the struggles of the fiscal year 2017 budget was loss in online sales tax revenue so the Amazon returns may benefit the state budget, which after six months of the fiscal calendar has ongoing receipts coming in $23.8 million under the adopted budget.
Also addressed during the discussion was a question about an amendment attached to last year’s half-cent sales tax increase bill, which would reduce the half-cent addition only if revenue generated from online sales equaled what is raised by the half cent added.