The South Carolina Department of Revenue issued an advisory opinion in the form of “Information Letter 19–14: Marketplace Facilitator” on Tuesday, May 7. It informs persons operating as a marketplace facilitator who sell tangible personal property in or into South Carolina of the requirements of the state’s Sales and Use Tax law in light of Act No. 21 of 2019, which became effective April 26, 2019.
In enacting the law, the General Assembly found that retailers selling another person’s tangible personal property on the internet must clearly understand and be informed of their requirements to remit the sales and use tax in the same manner as retailers selling another person’s tangible personal property in a brick and mortar store.
This law reinforces that a person operating as a marketplace facilitator is a “retailer” or “seller” under the South Carolina sales and use tax law and is responsible for remitting sales and use tax on all retail sales made via its marketplace, unless otherwise excluded or exempted from the tax.
(See new Code Section 12-36-71 for the definition of “marketplace facilitator.” See Code Section 12-36-70, as amended by Act No. 21 of 2019, for the definition of “retailer” and “seller.” A person whose products are sold exclusively through a marketplace facilitator is not a South Carolina retailer, regardless of whether the person has nexus with South Carolina. This person is not required to obtain a retail license since the marketplace facilitator is the retailer required to remit South Carolina sales and use tax.)
Any person who has nexus with South Carolina and is engaged in business as a retailer must remit the sales and use tax on all retail sales of tangible personal property, unless otherwise excluded or exempted from the tax.
(Economic nexus exists when a person’s gross revenue from sales delivered into South Carolina exceeds $100,000 in the previous calendar year or the current calendar year. See SC Revenue Ruling #18-14 for guidance on economic nexus, registration and tax remittance.)
This requirement applies to all retail sales of tangible personal property by the retailer, whether the tangible personal property is owned by the retailer or another person. Retailers selling tangible personal property at retail on consignment, by auction, or in any other manner must remit the sales and use tax on such retail sales.
All internet marketplaces where a person sells tangible personal property at retail by listing or advertising, or allowing the listing or advertising of, another person’s products on an online marketplace and collects or processes the payment from the customer are retailers required to remit the sales and use tax on such retail sales under the provisions of South Carolina sales and use tax law.
A marketplace facilitator without a physical presence in South Carolina should review the DOR’s remote seller webpage dor.sc.gov/remotesellers.
A marketplace facilitator may obtain a retail license via the Department’s online portal at MyDORWAY.dor.sc.gov.