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Amazon and South Carolina Use Tax Notifications

  • Feb 1, 2013 | Gail Cole

 Amazon's First Steps toward Sales Tax Collection in South Carolina: Use Tax Notifications.

In 2010 and 2011, Amazon and the state of South Carolina clashed over sales tax. Amazon wanted "sales tax collection exemption," and the South Carolina Legislature said no. In response, Amazon threatened to cease work on a fulfillment center that was under construction and that, when completed, would bring some 1,200 jobs to the area.

By the end of 2011, the distribution facility in Lexington County was up and running and plans for another were in the works. In January 2102, Amazon announced it would "open a new fulfillment center in Spartanburg County," which it did in the fall. 

When speaking about the proposed Spartanburg facility at a Columbia Rotary Club meeting, Paul Misener of Amazon said, "We're well on our way to creating 2,000 jobs and investing $125 million [in South Carolina]." A good thing, too. Amazon and South Carolina have a deal: so long as Amazon creates 2,000 jobs by the end of 2013, the state will not require the Internet retailer to collect sales tax until 2016. (Section 12-36-2691(B)(3)).

The deal also requires Amazon and its ilk to notify customers of their South Carolina use tax obligations. So while the online retailer giant is not collecting and remitting South Carolina sales tax just yet, it is making sure its customers know that they may have to pay use tax on Amazon purchases.

Pursuant to S.C. Code Ann. § 12-36-2691(E):

(1) "A person to whom this section applies who makes a sale through the person's Internet website shall notify a purchaser in a confirmation email that the purchaser may owe South Carolina use tax on the total sales price of the transaction and include in the email an Internet link to the Department of Revenue's website that allows the purchaser to pay the use tax."

(3) "A person to whom this section applies shall also by February first of each year provide to each purchaser to whom tangible goods were delivered in this State a statement of the total sales made to the purchaser during the preceding calendar year. The statement must contain language substantially similar to the following:

You may owe South Carolina use tax on purchases you made from us during the previous tax year. The amount of tax you may owe is based on the total sales price of [insert total sales price] that must be reported and paid when you file your South Carolina Income Tax Return unless you have already paid the tax."

The statements may not contain confidential information, such as what was purchased.

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Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.