House committee looking at a bill to collect sales tax from on-line retailers

Mar 9, 2017

Sen. Dwight Cook (R-Mandan).
Credit ND Legislature

A House committee is looking at a bill that could lead to North Dakota collecting sales tax from on-line retailers.

The bill could set up a court case to overturn the Supreme Court’s ruling in “Quill v. North Dakota.” In that case, the Court rejected the idea of states collecting sales tax from Internet retailers. Sen. Dwight Cook (R-Mandan)  is the sponsor. He said one of two things would have to happen to allow that tax collection.

"Number one, Congress could pass legislation that overturns Quill," Cook said in an interview. "But Congress has been reluctant. the other way is to go back to the Supreme Court."

Cook told the House Finance and Taxation Committee he's running out of patience with Congress -- and the time to move is now. He said he wants to set up an "economic nexus" to get the case before the high court. His bill proposes Internet retailers with sales of $100,000 or more, or with 200 or more transactions would have to pay sales tax.

"It's the unfairness of the playing field we have today, where brick and mortar companies are forced to collect and remit sales tax, when their competitors are not," Cook said. "It's a fairness issue."

Jeff Hinz owns two Bismarck hardware store. He told the Committee the brick-and-mortar stores pay local taxes that improve the quality of life in their locations.

"We are penalized for living here," Hinz said. "Those that do not contribute to the support of our state are rewarded with a government-sponsored price advantage."

Americans for Prosperity was the only group to testify against the bill. Spokesman Rob Linberg urged lawmakers to wait until Congress acts.