North Dakota looks to amend remote seller sales tax law

Update 3.18.2019: Senate Bill 2191 has been enacted. The 200 transactions threshold has been eliminated effective for taxable years beginning after December 31, 2018. Thus, as of January 1, 2019, remote sellers whose gross sales in the state exceed the $100,000 threshold must begin collecting tax on sales delivered during the following calendar year, or beginning 60 days after the threshold is met, whichever is earlier. 

North Dakota law originally required remote sellers with more than $100,000 in sales or at least 200 separate transactions in the state in the current or previous calendar year to register then collect and remit sales tax. A bill moving through the state legislature would amend that law.

It wouldn’t get rid of the remote seller sales tax collection obligation. Rather, North Dakota Senate Bill 2191 would remove the 200 transactions from the equation: Remote sellers with more than $100,000 in gross sales of tangible personal property and other taxable items in the state in the current or previous calendar year would be required to obtain a permit and begin collecting sales tax on the earlier of 60 days after the threshold is met, or the following calendar year.

This would simplify the determination for remote sellers, who would no longer need to maintain a running count of how many taxable transactions they make in North Dakota. It would also remove the collection obligation from smaller remote sellers: A business that makes 250 sales of widgets for a total of $50,000 in annual sales in the state wouldn’t be required to comply with North Dakota sales tax laws. As the law currently stands, the 250 sales would trigger a tax collection obligation.

The measure was overwhelming approved by the North Dakota Senate on January 17, 2019. If enacted, it would take effect retroactively on December 31, 2018.

Will other states follow suit? There’s a good chance at least some will. If they do, we’ll note the change on our list of state remote sales tax laws.

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