In June 2018, the U.S. Supreme Court ruled in favor of the states in the landmark case, “South Dakota Department of Revenue versus Wayfair, Inc.” The case, originally brought by South Dakota and signed onto by other states with sales taxes, sought permission from the Court to require outside businesses to collect a state’s sales and use taxes from its customers for items purchased through the internet and other remote platforms. In ruling for the states, the Supreme Court overturned an existing law requiring a physical presence within the state before the burden of collecting sales taxes could be imposed on a seller.
Four years later in June 2022, the state of North Dakota has collected $212.8 million in sales and use taxes from remote sellers delivering products into the state. In addition, North Dakota cities and counties that impose local sales taxes have received $52 million.
Since 2018, the amount of sales and use taxes collected by remote sellers has continued to rise. States particularly saw the impacts of the Supreme Court’s decision in 2020, as 18 months after the decision the COVID-19 pandemic advanced in North Dakota and the world. During this time, customers turned to the internet to purchase household essentials including food, clothing, pharmaceuticals, and more. In May of 2020, state sales taxes from remote sellers grew by more than 500 percent, compared to the previous May.
The North Dakota Office of State Tax Commissioner has created an interactive Power BI report that shows the tax collected by remote sellers in counties and cities with local sales tax. This report is updated on a quarterly basis and is found at www.tax.nd.gov/data.