Sales Tax Lawsuit

Sales Tax Lawsuit Click to Enlarge

South Dakota's Supreme Court has rejected a state law aimed at collecting sales taxes from out-of-state retailers.

It's a defeat the state wanted. South Dakota is hoping to get the U.S. Supreme Court to reconsider precedent that retailers can't be required to collect sales taxes in states where they have no physical presence.

South Dakota has no income tax and depends heavily on sales taxes. The state argues that tax fairness requires modernizing the law to account for growing online retailing.

Attorney General Marty Jackley, in a statement Thursday, highlighted part of the court's opinion that noted decreasing state revenues as internet sales have grown.

States - including North Dakota - have pushed Congress to address the issue without success, and one estimate put the loss to states at roughly $26 billion in 2015.

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