ND poised to start collecting sales tax from Internet retailers

Apr 25, 2017

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

The Legislature has set the stage for collecting state sales taxes from Internet retailers.

Sen. Dwight Cook (R-Mandan) introduced a bill to set up what he calls an “economic nexus” – that would allow North Dakota to start collecting those sales taxes – if Congress passes a bill to allow it, or if the US Supreme Court overturns its earlier ruling against that collection.

"In the case 'Quill v. North Dakota, the high court ruled states couldn't require Internet retilers to collect state sales tax," Cook said. "What we're doing here is creating an economic nexus."

That nexus is -- if an on-line retailer has $100,000 in sales to North Dakota customers, or who has at least 200 transactions from the state's residents, they would be required to collect state sales tax.

"When the Court made the decision in Quill, it said the states need to get their act together, clean up their sales tax laws, and then go to Congress -- and Congress should give the states that authority," Cook said. "Congress has been reluctant to do that. So, it's likely back to the Supreme Court."

Cook said with today's technology, the Supreme Court will make an entirely different decision.