SIOUX FALLS, S.D. - It is Cyber Monday.
Business experts project this will be the biggest online shopping day in US history!
But officials with the South Dakota Department of Revenue say online sales can put a drain on the budget if out-of-state retailers don't collect sales tax.
Taxes aren't normally people's favorite topic for discussion, but the use tax is useful for South Dakotans.
The use tax is sales tax shoppers pay on purchases made with out-of-state retailers, but some online sellers aren't collecting them.
It might not seem like a lot, but individual shopping purchases add up.
The Department of Revenue estimates the state is losing out on millions of dollars every year
It's that time of year again, shoppers are checking off their holiday wish lists with just a click of a button.
Cyber Monday sales are soaring, but this trend is affecting South Dakota’s budget.
“It’s estimated that South Dakota is losing out about $50 million per year,” Shawn Swanson with the Department of Revenue said.
That's because some out-of-state online retailers are not collecting the use tax.
“The use tax rate is the same as the sales tax rate,” Swanson said. “It's a big deal when the brick and mortar sales are lessening our tax base. Our tax revenues that are used to provide services are impacted,” Swanson said.
One of those services is public education.
“And so if the tax dollars go down, schools pay attention to that. They're concerned about how that will impact them,” Harrisburg School District Superintendent Jim Holbeck said.
It can hit them right in their wallet.
South Dakota was ranked one of the lowest nationwide for teacher pay and struggles with teacher shortages.
In 2015 lawmakers funded a teacher pay raise with a half penny sales tax.
“I do think eventually we might have seriously considered leaving the state and going to teach in other places just because the pay increase in neighboring states is a big difference,” Harrisburg School District teacher Danielle Place said.
So, do you owe a use tax on that online sale?
Officials with the Department of Revenue say you can find out if taxes were collected by checking your invoice. There should be a separate line item for sales tax. If it sales zero you ought to contact the Department of Revenue.
“The state of South Dakota relies heavily on the sales and use tax to fund the state,” Swanson said.
The past several years, the annual budget has seen many cuts and officials with the Department of Revenue it's important for individuals to pay this tax.
State officials say they count on individuals coming forward and reporting the tax, so it's up to shoppers to find out if they owe money.
People can easily pay the use tax on the Department of Revenue’s website with a credit card or bank account.