Amazon Alerting Customers About Sales Tax Owed to South Carolina? Is This Real?

I just got the following.

Hello from Amazon.com,

As you may or may not be aware Amazon.com LLC is not required to collect sales or use taxes in all states, including the state of South Carolina.

The South Carolina Department of Revenue requires us to provide the following notice to you:

You may owe South Carolina use tax on purchases you made from Amazon.com LLC 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 previous calendar year. The total sales price of only purchases you had shipped to South Carolina in 2011 was $136.42. This is the amount that you may include on your South Carolina income tax return to calculate the appropriate use tax owed unless you have already paid the tax.
While Amazon.com LLC does not report this information directly to the state of South Carolina we are required to provide this information to you based on South Carolina law Section 12-36-2691(E)(3).

As purchases from Amazon.com LLC can be made through various sales channels, we have included directly below your breakdown of purchases from the various channels.

Total sales from www.amazon.com $136.42
Please note the following:
The total sales represent all orders that were shipped to South Carolina during 2011.
Your purchases are subject to use tax 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.
This information should not be used for any federal income tax reporting purposes.
We are required to provide this notice in accordance with South Carolina law Section 12-36-2691(E)(3).
Notifications were sent to customers that had purchases delivered to South Carolina. If you are not a resident of South Carolina, the most common reason for receiving this notification is that you may have sent a gift to a recipient in the state.
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 Page: http://www.sctax.org/Tax+Information...

How Do I Pay my Bill: http://www.sctax.org/Tax+Information...

For more information you may also view our South Carolina Use Tax Notification Page at:
http://www.amazon.com/gp/help/custom...

Sincerely,

Customer Service
Amazon.com

There are news articles on it. It seems legit. It also seems insane.

We sent gifts to family in SC using Amazon. Won't be doing that again.

http://www.wyff4.com/r/30323211/detail.html

What the-

Surely you can't retroactively apply tax to things that were not taxed in the first place? That's insane.

If you don't live in SC, I don't think there's any way they can impose use tax on you. Your gift recipient might potentially owe tax, but probably not, since they didn't buy it themselves.

Yep it's real...


The Post and Courier of Charleston reported that the online retail giant is sending out reminders that customers who made purchases last year still have to pay sales tax, even though Amazon doesn't collect it.

The arrangement is part of a deal worked out when Amazon announced plans to build a distribution center in the state. Companies with online stores as well as physical locations in South Carolina, like Barnes & Noble, have to collect sales tax.

Amazon got a five-year exemption from that requirement, but is reminding customers they owe taxes to the state. Amazon does not give information on customers' purchases to the state, however.

Why does anyone bother to live in South Carolina?

Like Malor said, if you don't live in SC, you don't owe them any tax. You probably owe the state you do live in tax though. You live in Washington State, right?

WA's Use Tax[/url]]Use tax is due if:
...
Goods are purchased out of state by subscription, through the Internet, or from a mail order catalog company. Many of these companies collect Washington’s sales tax, but if the company from which you order does not, you owe the use tax.

I know that up here in Maine, if you do your taxes through the state's i-file system, they've got a calculator built in that bases your use tax on your income. I always use it since it has always calculated that I only owed around $5.

Duoae wrote:
What the-

Surely you can't retroactively apply tax to things that were not taxed in the first place? That's insane.


The problem is that (depending on what state you live in) they are taxed, but the online retailer doesn't have a physical presence in the state, so they're not required to collect that tax. It's why you see advertisements with fine print of "California residents must add sales tax" and the like. Some states don't require a use tax for residents, but do for businesses. So the taxes aren't being applied retroactively, they're just being reminded that buying something off of the internet is taxed the same way it would be if they bought it from a brick & mortar store down the street.

Amazon in particular has been under heavy fire from different states to collect sales tax. The state's argument is that people who are Amazon associates or run a storefront constitute a physical presence in the state they live in, which would mean Amazon is required to collect sales tax from residents of that state. Amazon doesn't want to do this, so usually they just shut down any associates/storefronts in the state to avoid the whole issue. In this case, it seems that South Carolina decided to settle for Amazon reminding their customers that they might owe the state back taxes.

Stengah wrote:
Amazon in particular has been under heavy fire from different states to collect sales tax. The state's argument is that people who are Amazon associates or run a storefront constitute a physical presence in the state they live in, which would mean Amazon is required to collect sales tax from residents of that state. Amazon doesn't want to do this, so usually they just shut down any associates/storefronts in the state to avoid the whole issue. In this case, it seems that South Carolina decided to settle for Amazon reminding their customers that they might owe the state back taxes.

Arizona tried this strong arm tactic with Amazon until Amazon threatened to pull its massive warehouse out of western Phoenix metro and relocated to a state that was more "Amazon friendly." Considering the horrible PR the AZ Legislature got when the bill was first crafted, I wasn't surprised to see the idea slowly die. Instead, they fell back on the self-reporting method, but since Amazon doesn't report customer transactions, the state is simply relying on the good will of the public to self report.

Duoae wrote:
What the-

Surely you can't retroactively apply tax to things that were not taxed in the first place? That's insane.

There is a section on the state tax return for any non-taxed purchases you made during the year (save states that don't have sales tax). You are supposed to put what you bought online in this section if you didn't pay taxes for the purchases. If you don't and get audited, you could be fined and if they determine you did it on purpose, could be charged with tax evasion. Online purchases have almost never been tax free. People either don't realize they still owe the taxes or are trying to game the system.

Edit: It isn't retroactive. It is just the government strong arming Amazon to help get people to file their taxes properly.

See, this is why i don't understand tax or tax laws. Let me give you an example:

If i travel to Toronto and buy something (say a stereo) then i pay local sales tax. I bring it back to the UK and it's mine (though i don't understand the idea behind import tax either - if i bought it and paid for it already how can the state tax me for my own property?).

If, instead, I pay a company in Toronto for the stereo and have it shipped to my address i should still have paid tax on that item in the local area - not where i'm having it shipped to.

These two instances are technically and logically the same it's just that *i'm* the one shipping the item myself in the first instance and someone else is doing it in the second. The tax should be applicable to where the item was sold from, not where you live or where you have it shipped to.

If the government (local or otherwise) wants to give "breaks" to these companies then that's their affair and it shouldn't affect me, the consumer who's already paying for the product.

That's my take on the above. I don't care if Amazon has to charge tax because it's literally coming from South Carolina. But if you purchase something FOR someone in SC? And it's retroactive? That's insane to me.

DSGamer wrote:
That's my take on the above. I don't care if Amazon has to charge tax because it's literally coming from South Carolina. But if you purchase something FOR someone in SC? And it's retroactive? That's insane to me.

Exactly, @ Kazar: it's retroactive because it wasn't made apparent at the time/point of purchase.

I've bought a lot of things internationally from Amazon and have never been told that i *may* have to pay tax on them. If i suddenly get an email saying i need to pay tax somewhere i've never been or thought about before then that's something that i didn't agree to or know about.

how can the state tax me for my own property?

They have the guns, and you don't. They can tax you for anything they like.

Malor wrote:
how can the state tax me for my own property?

They have the guns, and you don't. They can tax you for anything they like.

Malor, I'm with you, but if I'm being consistent with previous protestations of my threads getting derailed I have to say that runs the risk of turning this into another Libertarianism thread. We already have one for that. Please keep your peanut butter away from my chocolate.

As to this specific situation I'm simply nonplussed about the part that Duoae mentioned. If someone tells you at the time of purchase that this item will be taxed then fair enough. If they actually charge you for the tax then I won't love that, but at least I paid it at the time and don't have the hassle later. But this is really weird to me and I wonder if on Monday this won't be a bigger story. It has the feel of Amazon trying to embarrass SC. It's not a Quickster-level PR faux pas, but it is really really odd to me.

DSGamer wrote:
If someone tells you at the time of purchase that this item will be taxed then fair enough. If they actually charge you for the tax then I won't love that, but at least I paid it at the time and don't have the hassle later. But this is really weird to me and I wonder if on Monday this won't be a bigger story. It has the feel of Amazon trying to embarrass SC. It's not a Quickster-level PR faux pas, but it is really really odd to me.

I'm surprised they didn't tell you that at the time of sale. It's worth noting that Amazon is trying desperately to avoid collecting sales tax liability out of pure self-interest. They know not having to collect the tax leads to higher sales, and they don't care what effect e-commerce has on the local tax base.

Duoae wrote:
DSGamer wrote:
That's my take on the above. I don't care if Amazon has to charge tax because it's literally coming from South Carolina. But if you purchase something FOR someone in SC? And it's retroactive? That's insane to me.

Exactly, @ Kazar: it's retroactive because it wasn't made apparent at the time/point of purchase.

I've bought a lot of things internationally from Amazon and have never been told that i *may* have to pay tax on them. If i suddenly get an email saying i need to pay tax somewhere i've never been or thought about before then that's something that i didn't agree to or know about.

Retroactive means that it is a new tax that they are applying to old purchases. This has never been the case. It was always the law to pay these taxes and it was always on the tax forms. The fact that Amazon didn't tell you, is not the Governments fault but Amazon for trying to make you feel that your purcahse was tax free.

As for the example of buying something in Toronto and paying taxes on it. You can submit a sales tax refund document to the CRA asking for the money back and then pay your local taxes for the item.

I don't think Amazon has too many years left of not collecting sales taxes, and honestly it is probably a good thing. It becomes a lot more appealing to shop locally when you are going to have to pay that sales tax anyway.

Not really. Most of the local shops were run out of business in the 90's and 00's by chain stores and big boxes. At least Amazon delivers to my door. I would not trust Best Buy or one of the others to get *that* right...

Robear wrote:
Not really. Most of the local shops were run out of business in the 90's and 00's by chain stores and big boxes. At least Amazon delivers to my door. I would not trust Best Buy or one of the others to get *that* right...

I was mostly thinking of local comic book stores.

Pretty much all states have laws like this on the books. Used to apply to mail order stuff but now applies to online.

When I moved to Florida I was checking on car registration and driver licensing stuff and they have this "things you should know as a new resident" page, which mentions the use tax. Anything you import from another state and didn't pay sales tax on you're supposed to report and pay Florida sales tax on it.

The kicker is Florida doesn't have income tax. So you normally wouldn't be sending them any money at the end of the year... unless you bought some stuff and send them this tax.

Not ashamed to admit I didn't pay it last year, although we had only been here for 5 months and I'm not even sure how much stuff applied. Will probably check with my accountant next week when we do our federal taxes and see what he thinks about this year.


I was mostly thinking of local comic book stores.

lol I only buy graphics novels on Kindle Fire now. Oops.

Robear wrote:

I was mostly thinking of local comic book stores.

lol I only buy graphics novels on Kindle Fire now. Oops.


Hardcover is the way a true gentleman enjoys sequential art.

Robear wrote:

I was mostly thinking of local comic book stores.

lol I only buy graphics novels on Kindle Fire now. Oops.

I buy graphic novels in paper form, but singles are seductively sweet on the iPad. Overall, though, I agree with the sentiment that there isn't really much of a "shop local" angle here. I'm either giving my money to Toys R Us (in this case Christmas gifts for kids in my family) or to Amazon.


Hardcover is the way a true gentleman enjoys sequential art.

Plastic and glass not hard enough for you?

Seriously, I can drop $50 on a hardcover - or more - and $20 for the same thing on Fire. Most of the time what I'm looking for is not in stock, and the owner doesn't like ordering things for any customer who is not a regular. It's pretty arrogant, so I stopped going unless I really want to find something badly enough to be talked down to.

...So, you can not pay them anything and there's nothing they can do? Well, what do you think the banks would do in that situation?

4xis.black wrote:
...So, you can not pay them anything and there's nothing they can do? Well, what do you think the banks would do in that situation?

For DSGamer specifically, yes. He does not owe South Carolina any use tax. He does owe the state he lives in use tax for whatever he's bought online that would have been taxed if he bought it in a physical, in-state store. The email Amazon sent was just to inform him that he might owe tax on the items he had shipped to South Carolina.

Funkenpants wrote:
DSGamer wrote:
If someone tells you at the time of purchase that this item will be taxed then fair enough. If they actually charge you for the tax then I won't love that, but at least I paid it at the time and don't have the hassle later. But this is really weird to me and I wonder if on Monday this won't be a bigger story. It has the feel of Amazon trying to embarrass SC. It's not a Quickster-level PR faux pas, but it is really really odd to me.

I'm surprised they didn't tell you that at the time of sale. It's worth noting that Amazon is trying desperately to avoid collecting sales tax liability out of pure self-interest. They know not having to collect the tax leads to higher sales, and they don't care what effect e-commerce has on the local tax base.

Well, there are two points of self interest as to why Amazon doesn't collect sales tax. One is that it does give them a lower price point, since even if they match the local store in price it still comes out ahead because it doesn't collect sales tax. The other is that it is completely absofarkingly unreasonable to expect any entity that ships to all zip codes to be able to effectively calculate state and local sales taxes. The states DO NOT provide a service for doing this in an easy manner, thus it is an unreasonable burden on retailers. Also, if you did require this ala the Amazon tax in the interest of fairness you should slap every E-Bay selling individual or small business with the same burden. Selectively applying this to Amazon is BS.

However, I would like to point out that where I live, the sales tax is around 7%. Anytime I shop for anything and go to a Big Box store to check it out, I scan Amazon on my smartphone and the price is often 20-30% less. Making Amazon collect taxes isn't going to stop Best Buy from going belly up. Hell, I was just looking at a nice LED TV the other day that amazon had my local best buy beat by like $650.

Stengah wrote:
For DSGamer specifically, yes. He does not owe South Carolina any use tax. He does owe the state he lives in use tax for whatever he's bought online that would have been taxed if he bought it in a physical, in-state store. The email Amazon sent was just to inform him that he might owe tax on the items he had shipped to South Carolina.

So, theoretically, the worst-case scenario here would be you get audited, the government successfully subpoenas Amazon or maybe your credit card company or something to verify that you did in fact make online purchases for which you owe (but did not pay) state tax, and you get indicted for tax fraud? Is this a thing that could happen?

4xis.black wrote:
Stengah wrote:
For DSGamer specifically, yes. He does not owe South Carolina any use tax. He does owe the state he lives in use tax for whatever he's bought online that would have been taxed if he bought it in a physical, in-state store. The email Amazon sent was just to inform him that he might owe tax on the items he had shipped to South Carolina.

So, theoretically, the worst-case scenario here would be you get audited, the government successfully subpoenas Amazon or maybe your credit card company or something to verify that you did in fact make online purchases for which you owe (but did not pay) state tax, and you get indicted for tax fraud? Is this a thing that could happen?

Theoretically, sure. Even the Arizona 140 Income Tax filing I do every year has a line for the sales tax you are supposed to pay on online purchases.

However, I would think the Arizona Dept. of Revenue would be spending a lot of time and effort in order to garner 6.6% (the current state sales tax) on, say, $500. That's $33.00. I don't think the taxpayers would be thrilled to know that a tax auditor for the state is spending hours and hours auditing, getting subpoenas, putting a case together so they can recoup $33.00 plus interest and, perhaps penalties. However, I looked at the penalties and the person has to 1) have an income tax liability of more than $1000 in any given year in order for interest and penalties to apply and 2) if interest and penalties due apply, the interest would be about 4% and the penalty on that $33.00 would be $8.25. Assuming the auditor found that $33.00 discrepancy within one year of the filing, that total due would be $33.00 + $8.35 (penalty) + $1.32 (interest) for a grand total of $42.67.

I guess if they wanted to make a scapegoat out of someone that would work, but, again, I can't imagine the taxpayers of this state being thrilled that the DOR spent all that time, money and effort to get $42.67. They would have to do that for every person they suspected. I am sure the law is on the books for appearances, just like the IRS and state DORs will maintain that little Johnny mowing your lawn for $10.00 needs to report that income to the IRS.

4xis.black wrote:
Stengah wrote:
For DSGamer specifically, yes. He does not owe South Carolina any use tax. He does owe the state he lives in use tax for whatever he's bought online that would have been taxed if he bought it in a physical, in-state store. The email Amazon sent was just to inform him that he might owe tax on the items he had shipped to South Carolina.

So, theoretically, the worst-case scenario here would be you get audited, the government successfully subpoenas Amazon or maybe your credit card company or something to verify that you did in fact make online purchases for which you owe (but did not pay) state tax, and you get indicted for tax fraud? Is this a thing that could happen?

As Phoenix Rev says, yeah, it could happen, but it's not likely. It's more likely the more money you owe them. They'd go after a businesses that hasn't been paying their use tax (say by buying all their office supplies from an online retailer) before they went after some random guy who bought a lot of stuff on eBay. A few years ago my state had an amnesty program, where anyone who owed back taxes could pay what they owed and not be charged late fees or fines. They specifically mentioned use tax in a lot of the ads and press releases they had, and it was pretty successful.
It's also possible that they could use it as an excuse to go after you if you were in their sights for some other reason. I wouldn't be surprised if someone tried to target OWS members on the premise of tax fraud. I can just see people ranting about "how dare OWS demand the rich pay more taxes when they aren't even paying theirs!"

edit: oops, wrong thread. Sorry!

reply to wrong thread reply.