Sales tax down for first quarter
Taxable sales for the first quarter of 2018 dropped 3.7 percent to the lowest level for the quarter since 2011, according to the North Dakota Office of State Tax Commissioner.
The quarterly report showed taxable sales and purchases in Jamestown of $50.2 million for January through March, 2018, compared to $52.2 million for the same period in 2017. Retail sales were down 4.1 percent while accommodations and food service declined 5.7 percent. Wholesale trade in Jamestown showed a 52 percent increase, climbing from $4.1 million to $6.3 million.
"I imagine JCPenney closing had a part in that," said Connie Ova, CEO of the Jamestown/Stutsman Development Corp, speaking of the decline. "Hopefully online sales tax will help."
Ryan Rauschenberger, state tax commissioner, said his office was taking steps toward enforcing a law passed by the 2017 North Dakota Legislature requiring out-of-state or remote businesses to collect sales tax from their customers in North Dakota.
The law was not enforced until a June 21 ruling by the U.S. Supreme Court allowing the practice.
"North Dakota is in as good a spot as any state," Rauschenberger said, referring to having a mechanism in place to collect sales tax on internet sales. "The ruling was on a South Dakota law, and the North Dakota law mirrors the South Dakota law."
Rauschenberger said his office is contacting large internet retailers to provide them with information on North Dakota sales tax regulations and urge them to become compliant.
At stake is an estimated $25 million to $50 million in taxes owed to North Dakota and local governments each year, he said.
"I'm cautiously optimistic," Rauschenberger said. "It will take time, depending on how quickly the retailers take this on."
North Dakota law requires any remote business doing a minimum of $100,000 per year in the state to collect local and state sales tax. The state participates in a streamlining process with about 22 other states that furnishes retailers maps of where local sales taxes are due and administrative rules for each state.
Rauschenberger said the state will accumulate information about remote sales, although it will take about one year to gather full statistics.
In the meantime, Becky Thatcher-Keller, executive director of the Jamestown Area Chamber of Commerce, said she hopes local sales improve.
"I think people, especially farmers, are in a wait-and-see mood," she said.