internet sales taxes | Prairie Public Broadcasting

internet sales taxes

It’s been two years since North Dakota has been collecting sales taxes from Internet retailers.

That was made possible in the "Wayfair v. South Dakota" court case, which overturned the earlier "Quill v. North Dakota" decision.

"We've collected almost $60 million in state and local taxes from that decision in just two short years," North Dakota Tax Commissioner Ryan Rauschenberger said.

Dave Thompson / Prairie Public

Since the US Supreme Court decision, requiring on-line retailers to submit state and local sales taxes, North Dakota has collected $27 million.

North Dakota Tax Commissioner Ryan Rauschenberger gave that information to the Legislature's interim Tribal Taxation committee. Rauschenberger said more than 5700 on-line retailers have registered to remit the tax. And he said expects collections to continue to grow.

2018 saw increase in ND taxable sales and purchases

May 1, 2019

2018 was a very good year, in terms of taxable sales and purchases in North Dakota.

"They're up about 12 1/2 percent" said North Dakota Tax Commissioner Ryan Rauschenberger.

That’s compared to 2017. Those sales and purchases totaled $20.24 billion, compared with just under $18 billion in the previous year.

The reason – better oil prices, spurring more activity in the oil patch. Rauschenberger said the price of oil averaged around $65 a barrel.

North Dakota's Tax Commissioner said more than 2,100 online retailers have registered to collect North Dakota sales tax.

Ryan Rauschenberger said that’s been growing by about 100 per week. He had set an October first deadline for the online stores to register.

"Nationally, these companies aren't just registering here in North Dakota," Rauschenberger said. "They're registering in 44 other states with sales taxes.  And there's a bottleneck with companies that help them do this."

Results for taxable sales and purchases in North Dakota are in for the third quarter of 2018.

Those totaled $5.61 billion for the months of July, August and September. That compares with $4.74 billion for the same three-month period in 2017.

"We're up 18 percent," said North Dakota Tax Commissioner Ryan Rauschenberger. "That's the largest percentage increase we've seen since 2012, in a single quarter."

Rauschenberger said when you look at statewide numbers, five of the six largest cities in North Dakota were either flat or showed increases.

More than 1000 Internet retailers have registered with the North Dakota Tax department, saying they will start collecting North Dakota state sales taxes.

Monday was the deadline for companies to register.

North Dakota Tax Commissioner Ryan Rauschenberger said Internet retailers with sales of more than $100,000 annually in North Dakota have to start collecting sales tax. He said his department has been focusing compliance efforts on the 1,000 largest national Internet retail sellers.

State revenue recovering

Oct 2, 2018

North Dakota’s revenue picture continues to improve.

In August, revenue collections exceeded the Legislative forecast by 10 percent. For the biennium to date, collections are nearly 4 percent ahead of forecast.

"It indicates again that we've seen the bottom," said state Office of Management and Budget director Joe Morrissette.

Morrissette said increased oil activity in western North Dakota means increases in oil taxes and sales tax collections. Sales taxes for the month of August were nearly 26 percent ahead of forecast.

On-line retailers are facing an October first deadline to register with the state of North Dakota to start collecting state sales taxes.

North Dakota Tax Commissioner Ryan Rauschenberger said the first reflection of that will come in the taxable sales report for the fourth quarter of 2018. That won’t be available until 2019. Meanwhile, Rauschenberger had to come up with an estimate of tax collections from on-line sales, so that could be built into Gov. Doug Burgum’s executive budget recommendation, that will be given to state lawmakers in December.

As activity ramps up in the Bakken, sales tax collections from that part of the state are also ramping up.

Sales tax collections declined when the oil boom slowed down – and that was a big part of the reason the 2017 Legislature had to cut budgets.

And it also affected city sales tax collections.

"We're experencing a bit of a decline in those collections," said Bismarck city administrator Keith Hunke. "In 2015, we collected about $17.5 million; in 2016, we collected $16.7 million; and last yar, we collected $15.7 million."

The US Supreme Court has ruled states and local government can require Internet retailers to collect sales taxes.

The 5 to 4 ruling reverses a 1992 decision, in which the court ruled a retailer had to have a physical presence in that state to collect sales taxes.

North Dakota US Senator Heidi Heitkamp (D) was North Dakota’s Tax Commissioner at that time. She took that first case to court – it was called “Quill versus North Dakota.”