NEWS BRIEFS: On Amazon’s sales taxes; Legislators opposed to offshore drilling

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Is Amazon responsible for third-party seller’s sales taxes? SCDOR says yes

Amazon didn’t have to worry about paying taxes on South Carolina sales for five years thanks to the blessing of lawmakers of a controversial incentive package.  It allowed the retailer to escape state sales taxes until 2016. But when the online giant started collecting, South Carolina says Amazon came up short — about $12 million short in the first quarter of 2016.

The state’s battle is getting national attention as President Donald Trump tweeted this week that the company is doing “great damage” to other retailers by not paying state sales taxes.

The alleged S.C. shortfall centers on sales by third parties  from which the S.C. Department of Revenue says Amazon is responsible for collecting state sales taxes.

The big and controversial  tax break expired Jan. 1, 2016, after the state used it to lure the company and a thousand jobs to Lexington County. At the time, it was estimated that the sales tax from Amazon sales in South Carolina would bring in more than $11 million to the state’s coffers annually. Now, the Department of Revenue says it missed out on at least that amount in only third-party sales in the first three months of 2016.

The amount Amazon has paid so far in sales taxes since 2016  “is confidential taxpayer information and cannot be disclosed under S.C. Code of Laws 12-54-240,” according to Bonnie Swingle, public information director for the tax agency. To date, the state has only released numbers of what it is missing through its complaint. It hasn’t said what Amazon has actually paid.

In early 2016, Fortune reported 45 percent of sales on Amazon occurred from third-party sellers.

Amazon says its affiliated, third-party retailers are responsible for collecting taxes.  But the state Department of Revenue clearly disagrees. In June, the tax collecting agency filed its case with S.C. Administrative Law Court, an autonomous quasi-judicial agency within the executive branch.

Amazon has received $64.3 million in state and local economic incentives for its fulfillment centers in the state, according to Good Jobs First’s subsidy tracker.

— Lindsay Street, Statehouse correspondent

Boatload of lawmakers oppose offshore drilling

A bipartisan group of 32 state legislators this month sent a sharply-worded letter opposing efforts to open offshore drilling and exploration for oil and gas along the Atlantic coast.

An oil-cover bleach bottle that washed up on the Gulf shore after the Deepwater Horizon tragedy. Photo by Andy Brack.

“The State of South Carolina is proud of our successful efforts to preserve the natural beauty that makes our state unique,” said the letter signed by 15 Republicans and 17 Democrats in the S.C. General Assembly. “We cannot afford to risk our natural beauty, distinctive sense of place, fragile ecology, and the multitude of outdoor recreation and tourism opportunities for the purported benefits of offshore oil and gas drilling. Doing so would be a step backward for our great state.”

The letter to the federal Bureau of Ocean Energy Management opposed including the coast of South Carolina in the nation’s oil and gas leasing program for 2019-24 for several reasons:

  • Safety. The letter notes little has been done to make offshore drilling safer since the Deepwater Horizon tragedy seven years ago that killed 11 people and spewed 200 million gallons of oil into the Gulf of Mexico.
  • Tourism. It outlines how more than 80,000 South Carolinians are employed in coastal tourism and depend on beaches and coastal landscapes remaining pristine. “The quality of life we enjoy along our coast is a significant driver of economic growth opportunities, attracting international manufacturers as well as new residents.” The letter added that coastal tourism contributed $7 billion annual to the state’s economy.
  • Local opposition. More than 24 municipalities and counties formally oppose offshore drilling, the letter said. Additionally, it is opposed by the S.C. Small Business Chamber of Commerce and more than 400 business owners. Other opponents include Gov. Henry McMaster and Republican U.S. Reps. Mark Sanford and Tom Rice, who represent the coast.

Among those who signed the letter were:

S.C. Senate: Sens. Chip Campsen, R-Charleston; Darrell Jackson, D-Richland; Brad Hutto, D-Orangeburg; Greg Gregory, R-Lancaster; Scott Talley, R-Spartanburg; Thomas McElveen, D-Sumter; Marlon Kimpson, D-Charleston; Vincent Sheheen, D-Kershaw; Nikki Setzler, D-Lexington; Sandy Senn, R-Charleston; Mia McLeod, D-Richland; Gerald Malloy, D-Darlington; Luke Rankin, R-Horry; and Tom Davis, R-Beaufort.

S.C. House:  Reps. Mandy Powers Norrell, D-York; William Clyburn, D-Aiken; William Wheeler, D-Lee; Micah Caskey, R-Lexington; Beth Bernstein, D-Richland; Shannon Erickson, R-Beaufort; Lee Hewitt, R-Horry; Robert Brown, D-Charleston; Leon Stavrinakis, D-Charleston; Bill Herbkersman, R-Beaufort; Wes Newton, R-Beaufort; Mike Sottile, R-Charleston; Leola Robinson-Simpson, D-Greenville; Todd Rutherford, D-Columbia; Gary Clary, R-Pickens; James Smith, D-Richland; Murrell Smith, R-Sumter; and William Cogswell, R-Charleston.

“I thank these public officials who have signed the letter to BOEM for their recognition of the adverse consequences offshore oil and gas exploration and development poses to our coast,” said Ben Gregg, executive director of the S.C. Wildlife Federation.  “It is unimaginable that we would want to transform our beaches, marshes and scenic coastal environment into an industrial zone and threaten our cherished way of life and harm our significant wildlife and marine resources.”

— Andy Brack, editor and publisher

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One Comment

  1. Fred Palm says:

    Given the unexpressed need for oil and gas product exploration for new reserves at this time,
    it is recommend a delay in this process in order to employ a better surveying technology, one
    without the potential for so much damage to the ocean’s ecosystem and the economy of the
    area.

    The most immediate concern is the use of air gun technology. The vessels used for this process
    pull large arrays of airguns that fire every 10 to 12 seconds, 24 hours a day for months. Each
    firing creates the loudest noise in the ocean – 246 to 253 decibels. The data obtained from this
    survey technique is used to project where oil deposits might be located and how much oil may
    be found at the site. Then test wells are drilled to verify the data.

    Alternatives to sonic boom technology are emerging. Seismic prospecting, well logging, gravity
    surveying, magnetic prospecting, geochemical prospecting, ambient seismic field noise
    correlation tomography (ASNT) and control source electromagnetism (CSEM) are those most
    immediately available.

    Geospatial satellite technology using tens to hundreds of earth-imaging/surveying satellite
    systems will be circling the Earth in the next few years. Companies such as PlanetLabs,
    DigitalGlobe, Satellogic, Google, ViaSat, NorthStar, and Teledyne are developing and launching
    these networks as well as a host of companies from India, the European Union, Russia and
    China.

    Longer term in the development cycle is the use of the emerging satellite networks to locate oil
    and gas deposits by control source electromagnetism (CSEM), interpretation technology and
    earth systems modeling. Other technologies beyond these will likely emerge but are not
    knowable now.

    Delay will not impact national security, foreign policy, the US economy or the Federal
    budget. Delay will provide the opportunity to minimize the impact of the current violent air gun technology upon sea life.

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