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Why Did I Get a Notice from Amazon about South Carolina Use Tax?

Although it’s not a new thing, some of our readers may have seen Amazon’s SC Use Tax email for the first time this year. I personally received mine on January 27, 2016 – around the same time that I’ve received them in previous years. The email is sent from:

Amazon.com <usetaxnotification@amazon.com>

with the subject line:

South Carolina Use Tax Notification

And the body of the email looks like this:

THIS IS NOT A BILL

Hello from Amazon.com,

As you may know, Amazon was not required to collect sales or use tax on orders delivered to South Carolina prior to January 1, 2016. However, South Carolina does require us to provide you with the notification below. Since Amazon is now required to collect tax, this will be the last notification you will receive on this topic.

REQUIRED NOTIFICATION:

You may owe use tax on purchases you made from Amazon during the previous calendar year. The amount of tax you may owe is based on the total sales price of the items you purchased during the calendar year unless an exemption exists under state law or you have already paid the tax. A sale is not exempt under state law because it is made through the Internet. The total sales price of purchases you had shipped to South Carolina in 2015 was $42.55. This is the amount that you may include on your South Carolina use tax return to calculate the appropriate use tax owed unless you have already paid the tax.

In addition, the South Carolina Department of Revenue requires us to provide you with the following links that you can use to get more information and pay any taxes due:

Use Tax: http://www.sctax.org/tax/use

Paying Your Use Tax: https://www3.sctax.org/DOREPAY

We have included, directly below, your breakdown of purchases from Amazon:

  • Total sales from Amazon.com LLC $42.55
  • Total sales from Amazon Warehouse Deals LLC $-
  • Total sales from Amazon Digital Services, Inc. $-
  • Total sales from MyHabit $-

Please note the following:

  • While we do not report this information directly to the state of South Carolina, we are required to provide this information to you based on South Carolina law section 12-36-2691 (E)(3).
  • This notification has been sent to all customers that had purchases delivered to South Carolina. If you are not a resident of South Carolina, the most common reason for receiving this notification is that you may have sent a gift to a recipient in the state.

Thank you for being a loyal customer. We appreciate your business and look forward to continuing to provide you vast selection, low prices, fast delivery and convenience.

Sincerely,
Customer Service
Amazon.com

Why did I receive this?

This email is sent from Amazon to anyone who has purchased items for sale on their website or associated properties, for shipment to an address within the state of South Carolina. If you received the email, then sometime within the 2015 calendar year, you made one or more purchases and shipped them to yourself or another recipient in South Carolina.

Amazon had a deal with the state of South Carolina where, through the end of 2015, they weren’t required to collect sales tax on purchases shipped to South Carolina. That agreement expired on January 1, 2016, so this is the last year they will be sending this email (unless something else changes).

Do I owe anything?

The short answer: Probably.

The longer explanation goes back to something called use tax.

When a taxable sale is made, including online orders, if sales tax isn’t collected by the seller, then in many cases, it’s still taxable. The purchase is subject to "use tax", and due from the buyer. We’ve discussed use tax before, so if you want more information, refer to our post on use tax versus sales tax.

Generally, this means that you should complete a South Carolina use tax return and pay the appropriate use tax amount to the state of South Carolina. Whether you choose to do so is up to you, and you may wish to seek advice from your accountant, enrolled agent, or legal counsel.

How does this affect my e-commerce business?

It doesn’t. This email solely affects Amazon buyers – not Amazon sellers. Even if you sell on Amazon or use Fulfillment by Amazon services, this email is unrelated. And if you didn’t purchase anything on Amazon and ship it to South Carolina, then you probably didn’t even get an email.