Last month for sales tax free Amazon orders in South Carolina
South Carolina reminds shoppers that Amazon orders will lose their sales tax free status as of Jan. 1, 2016.
As of New Year’s Day, South Carolina will become the 27th state to require sales tax be collected on Amazon orders. Amazon has long been aware that it will lose its sales tax free status. The deal the state’s legislature made back in 2011 with the retailer in exchange for in-state jobs expires after this month.
South Carolina expects to collect many millions of dollars once sales tax free Amazon shopping is a thing of the past. “We expect a significant increase in sales tax revenues,” said Rick Reames, state Revenue Director.
Amazon’s policy used to be to pull business out of states that tried to force it to collect sales taxes. South Carolina was among 10 states that gave Amazon a temporary tax reprieve in exchange for jobs and investment. In return, Amazon placed distribution centers in Lexington County and Spartanburg.
Even during the 4 1/2 years Amazon didn’t collect sales tax on South Carolina transactions, by law shoppers were still responsible for paying the tax not collected at the time of purchase. As per its compromise with the legislature, Amazon has e-mailed customers a yearly tally of what they’ve spent, reminding them they may owe the use tax on their income tax returns.
Even though Amazon did not share purchase information with the state’s department of revenue, use tax collections increased from $1.4 million in 2011 to $4.1 million in 2013 which the department attributes to awareness the e-mails generated.
Items sold by Amazon.com LLC, or its subsidiaries, and shipped to destinations in the following states are subject to tax:
- No sales tax is charged when purchasing gift cards; however, purchases paid for with gift cards may be subject to tax.
- Items sold by Warehouse Deals and shipped to destinations in Alaska are subject to local sales tax.
- Textbooks rented from Warehouse Deals and shipped to destinations in Delaware are subject to tax.
Lucinda Rowlands has been the general manager at Zip2Tax since 2010. She has extensively researched sales and use tax regulations in order to help small businesses navigate complicated tax rules.