Podcast: Tax Commissioner Says Enforcing State Sales Tax on Online Shopping Could Be Challenging

On my radio show today Republican Tax Commissioner Ryan Rauschenberger said his office has spent “hundreds of hours getting ready” to apply the state sales tax to out-of-state online retailers should the Supreme Court rule that sort of policy legal.

Earlier this week SCOTUS did just that, but Rauschenberger admits that enforcing the law may not be very easy. For now the state is going after the biggest online retailers, but beyond that compliance may become a “rudimentary” exercise in searching for people who are advertising in the state and then checking their compliance.

But North Dakota’s online sales tax law, passed during the 2017 legislative session in anticipation of the Supreme Court’s actions, has a threshold which will mean many small retailers won’t get caught up in it. Businesses must have sales north of $100,000 in North Dakota, or register at least 200 transactions, to have the state law apply to them.

Rauschenberger said online sales taxes are typically calculated based on where the product is delivered, and that local taxes would be factored in. Meaning that if you order an online product and have it delivered to, say, Dickinson you’ll pay not just the state sales tax but also whatever local sales taxes are in place.

He estimates that the state will see somewhere between $25 million to $50 million per year in additional revenue. He also said that the way North Dakota’s law was written, it “went into effect yesterday.”

Former Fargo city commission candidate Linda Boyd also joined me today for a discussion about identity politics. Here’s the full audio of today’s show. If you can’t listen live, get the podcast.

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