BISMARCK, N.D. - In 1992, the Supreme Court ruled that if a catalogue company didn’t have a physical presence in North Dakota, they didn’t owe sales tax.
“How they knew that they were losing money is that people would come to the stores with the catalogue, look at the product, ask people about the pricing, then walk out and order it,” says Sen. Heidi Heitkamp, D-N.D.
Not many people shop with catalogues anymore, but they they do shop online, turning that ruling into a different monster entirely.
Tax Commissioner Ryan Rauchenberger explains, “If states were allowed to collect sales tax from online vendors, we could see as much as $45 million a biennium, a 24-month period that isn’t being collected now.”
That’s $45 million that could be spent on “police department, teachers, fireman, all the amenities that everybody wants,” said Madonna Wald, local business owner.
Wald owns several storefronts downtown and has to compete with online retailers every day.
And they have an advantage over her.
“The variants between the price with tax and without was often the margin that cost them the sale,” said Heitkamp.
“I don’t think it’s fair to penalize a business. You’re here every day, you employ people, you’re in the community, you’re trying to make a better place for a better city,” added Wald.
This month the Supreme Court will decided whether or not to retake the case. The fight to repeal is now a bi-partisan issue.
“We have to make sure that everyone is treated fairly; retailers, along with folks that sell on the internet.” said Sen. John Hoeven, R-N.D.
The latest push, led in-part by Heitkamp, has the ability to make online retailers accountable for what’s rightfully owed to the state.