Could South Dakota law help N.M.?
Smaller states have interest in how collecting state taxes from online retailers plays out.
Could a small, rural state like South Dakota be the first to eventually collect state taxes from online giants, such as Amazon? The issue goes back to a 1992 U.S. Supreme Court decision in Quill Corp. v. North Dakota that exempted internet sales from state taxes unless the company had a store, warehouse or subsidiary in the state.
That’s a tough burden for smaller states such as South Dakota and New Mexico, that don’t have the population or transportation networks to make those facilities viable. While large cities gain most from the internet — with more jobs, technology startups and professional services — it is smaller states that have been hurt most, as more and more purchases migrate to online vendors and commercial centers close.
Rebecca Beitsch in the magazine Stateline reports that many states are now watching a new law in South Dakota that can change the landscape — and apply a new standard nationwide.
“South Dakota hopes a law it enacted this year will force the courts to take a second look. The measure requires any online business that sells more than $100,000 worth of goods in the state or processes more than 200 orders for South Dakotans to collect a sales tax.
“South Dakota’s law goes beyond the Quill decision by stating that online businesses have a presence in the state simply because of the volume of sales they have there. South Dakota and other states are hopeful the U.S. Supreme Court will reconsider its Quill ruling based on that logic,” she reports.
South Dakota lawmakers picked the threshold because they know there will be costs in collecting the taxes, with added auditing and enforcement, and they didn’t want to see those eclipse the new revenue, according to Stateline.
The new Savers, a thrift superstore, is opening in Santa Fe on Thursday, June 9, with a ribbon-cutting ceremony at 8:45 a.m.
The chain has 330 locations across North America, with three in Albuquerque. The store in Santa Fe is at the site of the old Baillio’s, 3294 Cerrillos Road, and will be open Monday through Saturday 9 a.m. to 9 p.m., and Sunday 10 a.m. to 6 p.m.
Founded in 1954 and privately held, Savers is a forprofit company but has relationships with 120 nonprofit organizations. In New Mexico, the partnership is with Big Brothers Big Sisters, and clothing donations dropped off at the donation centers will benefit the organization, whether sold or not.
“The program funding we receive though our partnership with Savers allows us to better support the youth in the Santa Fe area,” Alan Wilson, chief operating officer of Big Brothers Big Sisters, said in a statement. “Not everybody is able to donate their time or money, but by visiting the store’s Community Donation Center or scheduling a home pickup with our team, the simple act of donating reusable goods becomes an easy way to support our community.”
But donors should remember that just a small portion of their contribution is going to the nonprofit — as the store is not set up by the organization but a corporation. That’s in contrast to Goodwill or the Santa Fe Humane Society, which operate their stores to provide services.
Savers, however, also boasts a different kind of shopping experience and “has pioneered a thrift store that defies typical expectations for secondhand shopping,” the company states in a news release. “The inventory is carefully curated so that shoppers are provided with easy access to high-quality goods at affordable prices. Customers will find a fresh stock of value-priced goods, including authentic vintage finds and name brand fashions, with up to 10,000 new items placed on the floor each day.”
For more information, contact the store directly at 505-919-7185 or visit www.savers.com.
The bond-rating service Moody’s Investors Service has given a slight downgrade to the state of New Mexico’s Severance Tax Bonds to Aa2 from Aa1.
The change indicates New Mexico’s credit is strong, but there are continuing uncertainties over state revenues.
“The downgrades are primarily attributable to the sharp reduction in coverage for the senior and subordinate lien bonds resulting from the decline in oil and gas prices and the expectation that coverage will not return to prior levels in the near term. The ratings also reflect the inherent volatility of the pledged revenue stream,” Moody’s writes in its recent analysis.
What that means in layman’s terms is that Gov. Susana Martinez and lawmakers have dipped significantly into reserve funds to pay for government operations, and that leaves very little margin of error should something else go amiss in the state economy.
When the state budget was approved, the estimate was for crude to hover around $37 a barrel, while today the price sits much higher at $49. The higher price is good news for the state’s finances, but it’s still significantly less than the $105 a barrel that West Texas Intermediate was trading at back in June 2014.