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SC's tax haul from online retail sales surges past $311 million

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Amazon tax bills come due (copy)

An April 2019 state law required online retail companies like Amazon to ensure taxes are paid on sales made within South Carolina. File

South Carolina hauled in more than $311 million in taxes from online retail sales over the past year, a big jump driven in part by policy changes within the state.

The S.C. Department of Revenue said the figure released Wednesday was based on e-commerce transactions between Nov. 1, 2019, and Oct 31. The total for the previous 12-month period was about $64 million.

The agency credited two tax-policy changes, through some of the increase is certainly tied to the surge in online sales this year as the COVID-19 pandemic shuttered many stores and forced consumers to stay home.

The first took effect in November 2018, when DOR started requiring out-of-state or "remote" retailers that sold more than $100,000 in goods within South Carolina to charge and forward sales taxes for those purchases. 

Then, about six months later, Gov. Henry McMaster signed a bill into law essentially extending that requirement to "marketplace facilitators," which allow other merchants to use their e-commerce platforms for a fee. Amazon.com is a prime example.

The Revenue Department noted that the number of out-of-state sellers that have registered with the agency climbed about 43 percent to 5,443 since late 2019. They accounted for about $128 million in tax collections.

Amazon and other marketplace facilitators remitted even more — $183 million. 

About half of the total pot of $311.5 million goes into the state's general fund.

"The SCDOR's remote sellers policy and the marketplace facilitator law now ensure that all online retailers collect and remit sales and use tax on all sales, just like brick-and-mortar stores, helping level the playing field and bringing more tax dollars into the state," agency director Hartley Powell said in a written statement Wednesday.

At least one lingering legal question remains unresolved over the collection of online sales taxes in South Carolina. 

DOR is seeking to collect more than $12 million from goods that independent merchants sold to Palmetto State shoppers through Amazon's "Marketplace" in early 2016.

The Seattle-based company, which lost in the first round of litigation, has maintained that it was not responsible for collecting those sales taxes at that time. The state disagrees.

The issue is now before the S.C. Court of Appeals. 

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Contact John McDermott at 843-937-5572 or follow him on Twitter at @byjohnmcdermott

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