After Decades-long Heitkamp Effort, North Dakota to Begin Collecting Sales Tax from Online and Out-of-State Vendors
Statement
Beginning Monday, October 1, North Dakota will begin to collect sales and use tax from online and out-of-state vendors, a huge victory for the state and small businesses that have been at a competitive disadvantage.
The change comes as a result of a decades-long effort by Heitkamp to level the playing field for brick-and-mortar business in North Dakota. As North Dakota's Tax Commissioner, she brought Quill v North Dakota before the U.S. Supreme Court in 1992 in an effort to require catalog retailers to collect state sales and use taxes. The case was not decided favorably, but Heitkamp has been fighting to overturn that decision ever since. At Heitkamp's urging, the Supreme Court took up a new case to resolve the issue earlier this year, and in its decision in South Dakota vs Wayfair, Inc. in June, the Court finally overturned its decision in Quill.
In addition to putting brick-and-mortar business on a level playing field with online vendors, the ruling will help increase state revenues, adding much needed resources that can support critical investments in education, infrastructure and other state projects. The state estimates that it could collect $50 million in additional revenue annually. In 2015 alone, the total uncollected sales and use taxes in the U.S. was nearly $26 billion. Retailers without a physical presence have a price advantage over brick-and-mortar businesses of up to 8.5 percent in North Dakota.
"After a long battle, this is a major victory to help level the playing field for the brick and mortar businesses our rural communities rely on," Heitkamp said. "This effort was all about getting fairness for the Main Street businesses that are so important to our way of life. I started this fight as North Dakota's Tax Commissioner in 1992, and it's great news for our state to finally see the issue resolved in a way that will make small businesses more competitive and boost state revenue, which benefits every community. "
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