In the wake of the U.S. Supreme Court’s recent decision in South Dakota v. Wayfair, Inc., the South Carolina Department of Revenue has released three Public Drafts for public comment on its written guidance of the application of the registration and tax collection requirements for the South Carolina Sales and Use Tax.
Because the U.S. Supreme Court reversed its longstanding position and eliminated its physical presence requirement, South Carolina will require retailers who do not have a physical presence in South Carolina but who establish an economic presence (as outlined) to remit the sales and use tax on a prospective basis beginning Oct. 1, or on a later date if provided.
Both “Public Draft – Remote Seller” and “Public Draft – Marketplace Operator” provide guidance to those with economic nexus with South Carolina.
“Public Draft – Marketplace User” provides guidance to persons whose products are listed and sold on another person’s online marketplace.
The public drafts can be found at the following links:
Retailers Without a Physical Presence (“Remote Sellers”): https://dor.sc.gov/resources-site/lawandpolicy/Advisory%20Opinions/Public%20Draft%20-Remote%20Seller.pdf
Online Marketplaces – Physical and Economic Nexus: https://dor.sc.gov/resources-site/lawandpolicy/Advisory%20Opinions/Public%20Draft%20-Marketplace%20Operator.pdf
Persons Using Another Person’s Online Marketplace To Sell Their Products – Registration and Tax Collection Guidance: https://dor.sc.gov/resources-site/lawandpolicy/Advisory%20Opinions/Public%20Draft%20-Marketplace%20Users.pdf
Email your comments to email@example.com by the comment close deadline of Monday, Aug. 27. You can track the draft progress at https://dor.sc.gov/policy/index/new-draft-advisory-opinions.
In accordance with Code Section 12-36-70 and the principles of Wayfair, a remote seller whose gross proceeds of sales of tangible personal property into South Carolina exceeds $250,000 in the previous calendar year or the current calendar year has economic nexus (i.e., substantial nexus) with South Carolina and is responsible for obtaining a retail license and remitting South Carolina sales and use tax.
The South Carolina sales and use tax requires any person engaged in the business of selling tangible personal property at retail to obtain a retail license and remit the sales and use tax to the Department. This requirement applies to all tangible personal property sold by the retailer, regardless of whether such property is owned by the retailer or a third party, such as a consignment sale or an auction sale.
The online marketplace is the same as any other retailer selling another person’s product, such as a consignment store or an auction house. For example, the operator of a consignment store is a retailer and must obtain a retail license and remit the South Carolina sales and use tax on all products sold in the consignment store, including products owned by another person. The person who places his items in the consignment store to be sold by the store is not the retailer and is not liable for the sales and use tax on sales made through the consignment store.