BRIEF: State says Amazon owes $57 million in uncollected sales taxes

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By Lindsay Street, Statehouse correspondent  |  South Carolina estimates that $57 million is missing from its coffers because retail giant Amazon failed to collect sales tax from third-party sellers. Amazon has disputed the claim, saying third-party vendors are responsible for any sales tax owed on those sales.

In a motion filed Wednesday with the S.C. administrative law court, the S.C. Department of Revenue (SCDOR) said that Amazon was responsible for collecting sales tax from all sales through its site, and that it has “selectively chosen to collect and remit on only some of its sales,”  costing the state out of millions over the last two years since a sales-tax exemption expired.

Previously, SCDOR only revealed a snippet of the alleged missing cash from 2016, saying Amazon failed to give the state $12 million in first quarter of 2016.

Amazon’s  tax break expired Jan. 1, 2016. The break was used to lure the company and a thousand jobs to Lexington County. At the time, it was estimated the sales tax from Amazon sales in South Carolina would bring in more than $11 million to the state’s coffers annually.

The state is asking the court to require Amazon to begin collecting taxes now and place it in a trust until the case is decided.

“Based on the information obtained from its audit, the Department projects Amazon could owe the State in excess of $500 million in unpaid sales and use taxes by the conclusion of this litigation,” the motion said.

Amazon has said in the past that it isn’t responsible for collection of sales tax from third-party vendors. According to a CNBC article, while Amazon disputes the claims, the company said in a quarterly earnings report it could ultimately “be subject to significant additional tax liabilities.”

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