BISMARCK, N.D. - Online retailers now have to start collecting sales tax in North Dakota, thanks to a Supreme court ruling in June that eliminated the so-called "physical presence" rule. The tax department says it expects about 25 million dollars in additional revenue by the end of next biennium.
Leveling the playing field: that's all Madonna Wald wanted. She owns two clothing stores in downtown Bismarck and says she's had some struggles the past couple of years. But with the new rules, she's confident positive changes are coming to her store.
With retailers playing the same rules, Madonna Wald says her stores have a chance to regain what they've lost.
"The last two years is a little bit tough because online really took off,” said Madonna Wald, owner of Kept in Bismarck.
June's Supreme Court ruling was seen as a win for small businesses and Tax Commissioner Ryan Rauschenberger says online businesses will sign up and comply, or face a heavy penalty.
"We will assess that 1 percent a month, 12 percent annual interest. Given the rates right now, that's well above market and it's locked in code,” said Rauschenberger.
Only 250 of the largest 1000 retailers have registered with the state so far.
"We need to basically go on a case by case basis because some of them may not have sales here. Most of those sales might be made up in California or New York where the population centers are and may not meet that $100,000 threshold,” said Rauschenberger.
As more companies become compliant, Wald thinks people will trade a computer for a walk downtown and end up with more than they planned.
"I see people coming in and they run into someone they know, they're visiting and saying let's go have some coffee and it's a great social event to do. You sit at home on the computer, you got nothing with that,” said Wald.
Rauschenberger says the department will be contacting companies about registering, but says because of the state's minimum thresholds, each one will be on a case by case basis. To register, you can find a link to the Tax Department here: https://apps.nd.gov/tax/tap/_/