Sales tax sign ups

Tax commission sees online retailers initiate compliance

Jill Schramm/MDN State Tax Commissioner Ryan Rauschenberger points to a graph of sales and use tax collections to show the collection curve that’s occurred from 2008 to 2017 during a presentation to Minot Golden K Kiwanis Wednesday.

About 500 new online retailers have signed up with the North Dakota Tax Commission to begin remitting sales taxes since a U.S. Supreme Court ruling in June allowed states to force collections.

State Tax Commissioner Ryan Rauschenberger, in Minot Wednesday to speak to the Golden K Kiwanis, said his office continues to sign up merchants ahead of an Oct. 1 deadline.

“We expect in the next few weeks we are going to have a lot more registrants,” he said. “There’s many, many more calls that we have taken. We have allocated a lot of our staff to registration and sales tax compliance.”

His office will be tracking the signup of about 1,000 major retailers and will be reaching out to those that haven’t contacted the state by Oct. 1.

Tax collections from internet sales are expected to boost state sales tax revenue that has been showing some rebound since dropping off after the oil boom. Rauschenberger presented data showing what he called an “economic reset” in the past year.

Jill Schramm/MDN State Tax Commissioner Ryan Rauschenberger addresses Minot Golden K Kiwanis Wednesday.

“We do in the long run see an overall growth. We do expect to see a bit of an upturn in the future,” he said.

However, Minot’s sales tax collections continued to lag 2017 in the first quarter of this year and it appears the same will be true when second-quarter figures come out, Rauschenberger said.

“Some of that is due to a decline in occupancy rates in hotels,” he said.

North Dakota also could see an increase in sales tax if wind energy continues to grow. The Legislature removed a sales tax exemption, which means companies must now pay sales tax on materials brought into the state to construct wind farms.

Sales tax from the oil industry is down as companies have become more efficient, requiring less equipment and manpower and as costs of those supplies have fallen, Rauschenberger said. On the other hand, the state is expected to exceed its forecast of $3.15 billion in oil tax collections, he said. The new projection is about $4 billion this biennium.

The new push to collect online sales taxes is impacting not just the state but also in-state retailers who market online. Rauschenberger said North Dakota and 24 other states are part of a streamlined registration system that automates the signup process. If not selling into a member state, though, retailers can face challenges in dealing with multiple state regulations.

Rauschenberger said the Supreme Court ruled states cannot put undue burden on retailers to collect, but it may take another court case to sort that out. North Dakota requires collections from businesses only if they do $100,000 worth of sales in the state or 200 or more transactions. Some states have no restrictions and require collections on all sales.

He said his office encourages retailers who have questions to talk to professionals in the area of multi-state sales tax collections to ensure they are complying with the various laws.