South Carolina shoppers are supposed to pay state sales taxes for their online purchases under the honor system. Many don’t.
They won’t have a choice starting Friday for purchases they make through Amazon, the world’s largest online retailer.
A tax break passed by state lawmakers in 2011 expires on Jan. 1, putting South Carolina in line with other states where officials cut similar deals to induce the company to make investments and create jobs.
Requiring Amazon to collect taxes on its in-state sales could add tens of millions of dollars to South Carolina’s treasury in 2016, Max Behlke, the National Conference of State Legislatures’ manager of state and federal relations, told the Associated Press recently.
S.C. Department of Revenue officials aren’t that optimistic.
“According to information from the State Revenue and Fiscal Affairs Office, an estimated $13.8 million in additional revenue is expected for the state of South Carolina,” said spokeswoman Bonnie Swingle.
Amazon fought collecting sales taxes from its customers for years, citing U.S. Supreme Court decisions that a state can’t require a company to collect the tax unless it has a “physical presence” in the state.
In 2011, the S.C. Legislature approved a 4½-year tax break for the Seattle-based company if it agreed to build a distribution center in Lexington County. Another was later built in Spartanburg.
That tax break ends Friday, when Amazon will have to begin collecting sales taxes from its South Carolina customers and passing the revenue onto the state.
While Amazon doesn’t yet collect taxes in South Carolina, by law shoppers are still responsible for paying the state what they don’t pay online when they file their income tax returns, but many people ignore the requirement.
Amazon officials did not return phone and email messages Thursday.
Reach Warren L. Wise at 843-937-5524 or twitter.com/warrenlancewise.