RAPID CITY, S.D. (KOTA TV) – What many thought would be a bureaucratic nightmare for local business is turning out to be a lot easier than expected.
On Monday, 10 states started collecting sales tax from online transactions. While South Dakota isn’t one of them, local retailers with an online presence are affected.
One such business is Prairie Edge Trading Company in downtown Rapid City. The business sells Native American merchandise all around the world and, while they will now need to pay sales tax on their online products, they are not the ones actually collecting the money.
That task falls to the middleman that handles the actual transaction – companies like pay-pal.
“We don’t really have to do too much,” said General Manager Dan Tribby. “Our internet provider and the people who accept our payments from online. . .that really is going to end up landing on them and it’s really as simple as applying a plug-in into our system.”
Tribby is referring to piece of software that is applied to their current system that will automatically charge the correct amount of tax to an order based on whatever the tax structure is where the customer is ordering.
“It will still come through us and we’ll end up being responsible for ensuring the right payments go to the right states and the right municipalities, but we won’t be sitting there on every transaction wondering what the tax structure for Pensacola is. That will all be in the programming,” Tribby said.
The states collecting online sales tax starting Monday are: Alabama, Illinois, Indiana, Kentucky, Massachusetts, Minnesota, Michigan, North Dakota, Washington and Wisconsin.
South Dakota will begin collecting online sales tax Nov. 1.