South Carolina Will Require Remote Sellers to Collect Tax Starting November 1

South Carolina will collect sales tax from remote sellers starting November 1, 2018. The state has laws  allowing it to require remote sellers to collect sales tax, but has not enforced them. The state reversed its position after the decision in South Dakota v. Wayfair, Inc.

South Carolina Economic Nexus

A remote seller with economic nexus with South Carolina must collect sales and use tax. Economic nexus occurs when gross sales into South Carolina are more than $100,000 in the current or last calendar year.

To see if it has economic nexus, a remote seller adds the gross proceeds from sales into the state of:

  • retail, exempt retail, and wholesale sales of tangible personal property;
  • products transferred electronically; and
  • all sales by the remote seller, including sales of another person’s property.

Property owned by the remote seller, but sold by a marketplace seller, are not included in gross proceeds. The marketplace seller must get a license and collect tax.

Collection of South Carolina Sales Tax

Remote sellers must get a retail license and collect by November 1, 2018, if they had economic nexus in:

  • calendar year 2017; or
  • from January 1 though September 30, 2018.

Remote sellers with economic nexus on or after October 1, 2018, must collect tax starting the first day of the second calendar month after nexus.

Remote sellers without economic nexus can still collect and remit tax.

Revenue Ruling 18-14, South Carolina Department of Revenue, September 18, 2018, ¶400-914

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CCHTaxGroup

All stories by: CCHTaxGroup