S.C. collects nearly $64M in sales tax from online retailers

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In the past year, thousands of out-of-state retailers have reported collecting nearly $64 million in state sales taxes, the S.C. Department of Revenue reported.

The sales tax collections are in response to a ruling from the U.S. Supreme Court in June 2018 in the case of South Dakota v. Wayfair. The court ruled that an out-of-state retailer with no physical presence in the state can be required to collect and remit sales and use taxes in states where they meet specific economic thresholds, according to a news release.

Beginning Nov. 1, 2018, an out-of-state retailer with more than $100,000 in gross sales revenue in South Carolina was required to obtain a retail license and remit state sales and use taxes. Since then, the SCDOR said nearly 3,800 remote sellers have registered with the state and reported $63,986,033 in sales tax revenues through Oct. 31, 2019.

Of that total, $33.9 million will go into the state’s general fund, $8.48 million will go into the state Education Improvement Act fund, and $8.48 million into the state’s Homestead Exemption Fund, the department said. The rest will be distributed to local governments, with nearly $3 million earmarked for capital projects, $3.7 million for local option, $3.2 million for schools, $2.5 million for road improvements and $468,330 for tourism development.

In April, S.C. Gov. Henry McMaster signed the Marketplace Facilitator Act that clarifies and reinforces sales tax collection requirements for retail sales, including online sales. The act coincided with the state’s longstanding sales tax policy that requires retailers to remit sales and use tax on retail sales on non-exempt personal property.

“This means an additional $64 million will be available for education, property tax relief, roads or other needs in South Carolina,” Hartley Powell, SCDOR director, said. “The SCDOR’s policy and the law passed earlier this year now ensures that all online retailers collect and remit sales and use tax on all sales, just like brick-and-mortar stores.”