If you live or have items shipped to South Carolina and buy on Amazon, you may have recently received an interesting email. It goes like this:
Hello from Amazon.com,
As you may know, Amazon was not required to collect sales or use tax on orders delivered to South Carolina prior to January 1, 2016. However, South Carolina does require us to provide you with the notification below. Since Amazon is now required to collect tax, this will be the last notification you will receive on this topic.
You may owe use tax on purchases you made from Amazon during the previous calendar year. The amount of tax you may owe is based on the total sales price of the items you purchased during the calendar year unless an exemption exists under state law or you have already paid the tax. A sale is not exempt under state law because it is made through the Internet. The total sale price of purchases you had shipped to South Carolina in 2015 was $XXX.XX. This is the amount that you may include on your South Carolina use tax return to calculate the appropriate sales tax owed unless you have already paid the tax.
In addition, the South Carolina Department of Revenue requires us to provide you with the following links that you can use to get more information and pay any taxes due:
Use Tax: http://www.sctax.org/tax/use
Paying Your Use Tax: https://www3.sctax.org/DOREPAY
So what does all this mean?
Paying South Carolina Use Tax as an Amazon Buyer
This letter is about “use tax.” Use tax is the tax that states require their taxpayers to pay if they have bought something tax-free on the internet for use within the state (hence the name.) As you can see from our article on use tax, while it is the law of the land – for the most part you should be paying use tax to your state on every untaxed internet purchase you make – it is incredibly hard to enforce. That’s why some states, South Carolina included, require certain online retailers to make their customers aware of their use tax obligations.
So in this particular case, Amazon.com was not collecting sales tax in South Carolina during 2015. And they sent this letter to their buyers to inform them that they made a certain dollar amount of purchases in South Carolina and should report that dollar amount to the South Carolina Department of Revenue as “use tax.”
Also, Amazon.com’s no-tax deal with South Carolina ended on January 1, 2016 and now Amazon is collecting sales tax from buyers within the state. So the above notice is the last one Amazon will be required to send to their buyers in South Carolina.
Whether you, as a buyer, report your use tax to the state of South Carolina is up to you and your accountant.
Does This Email Affect Amazon Sellers?
Though you may also be an Amazon seller, this notice was sent to you as an Amazon buyer. This notice doesn’t pertain to your business or whether or not you collect sales tax.
The fact that Amazon.com is now collecting sales tax in South Carolina doesn’t affect you or your Amazon business, either. Your Amazon MF or FBA business is a separate entity from Amazon.com, and your sales tax collection obligations are completely separate. So if you have sales tax nexus in South Carolina and were collecting sales tax before January 1, 2016 (when Amazon.com began collecting in the Palmetto State), your sales tax obligation hasn’t changed. You can find out more about sales tax collection for Amazon sellers in our FBA Sales Tax Guide.
Many thanks to Dean Jayroe for bringing this letter to our attention!