That sounds like a losing proposition, all right, but my problem with the AG's effort is that I'm dubious about South Dakota coming out a winner if SCOTUS sees things Jackley's way.
Jackley says that "we're fighting for Main Street businesses, we're fighting to give those Main Street businesses that even playing field." Considering that South Dakota in 2017 had retail taxable sales of $11 billion, the state is giving up a 9% slice of business to the internet, about $1 billion/year, extrapolating from the revenue loss claimed by the State. Nobody knows how much of that $1 billion in internet sales would be recovered if South Dakotans shopped locally based on the sales tax differential being eliminated. A 2017 study done by accounting industry giant KPMG, finds that online shoppers list convenience, ability to shop 24/7, ease of price-comparison, and better prices among their top four reasons for buying on the internet. No doubt the sales tax savings plays into pricing decisions, but other reasons are also powerful drivers when it comes to consumer purchases. I think it's reasonable to figure that adding sales taxes to online sales will redirect some business to South Dakota retailers, but a substantial amount of online sales will remain a significant part of consumer behavior just the same. It's probably a pipe-dream for Jackley and the rest of our government officials to contemplate a significant surge in local retail sales if SCOTUS sees things our way on this. Online shopping is here to stay, and in a big way.
More problematic is the effect that a successful outcome in our lawsuit will have on start-up ventures in South Dakota. Every retailer with online aspirations will be forced to deal with the myriad of state and local tax issues confronting internet purchases. The expenses for potentially costly audits and sophisticated software that's able to navigate through this jungle is so high that Andy Pincus, speaking on behalf of eBay in the case, says "for small businesses on tight margins, these costs are going to be fatal in many cases." I question whether South Dakota's small business culture will be able to evolve and grow in an environment that favors bigger and better capitalized competitors in larger states.
Meantime, I wonder how Marty Jackley and his campaign for Governor in the coming GOP primary can square this lawsuit with his pledge to keep taxes low. Stripped of all the "level playing field" rhetoric, Jackley's proposing a tax increase on South Dakotans. The scramble for more revenues for our cash-strapped state has missed too many potential consequences that in the short-run will cost residents money and in the long run leave us limping in the competition for sales in the modern retail environment.