South Carolina Sales Tax Filing Update March 2019

What's changing in South Carolina?

Under existing South Carolina law an online marketplace is the retailer of all tangible personal property sold on its website and responsible for collecting and remitting the sales tax to the Department of Revenue.

  • Etsy began collecting sales tax on behalf of 3rd party sellers in this state on February 1, 2019.
  • Amazon began this collection on April 29, 2019
  • Walmart began this collection on May 1, 2019
  • As of May 10, 2019, we have not yet received confirmation that any additional carts currently supported as Marketplace Facilitators in TaxJar's Reporting have begun this automatic collection. 
  • We will update this article with more details as our research team receives more specific confirmation and guidance from the state's DOR as well as the currently supported Marketplace Facilitators.
  • You can view the state's guidance document here.

How does this affect me?

If you sell through a Marketplace that has agreed to begin collection in this state, you'll see sales tax collected in South Carolina for sales on and after February 1, 2019 on your TaxJar Dashboard and on your South Carolina Transactions page.

  • If you have never set up a filing frequency for South Carolina in your account's State Settings, our system will default the state to a monthly frequency and due date on your Dashboard after we see tax collected there. (We default to a monthly frequency and due date if you haven't yet adjusted any frequencies on your end, but the state itself would ultimately determine your exact filing frequency.) 
  • If you are currently opted in to receive email reminders for your sales tax due dates, you'll also see South Carolina listed as a state where you have an upcoming monthly return due in those emails.

I've never registered for a South Carolina license. Do I need to register for a sales tax license in South Carolina now?

Sellers with a physical presence in South Carolina have nexus in the state and need to register for a sales tax license. 

  • Note that inventory stored in an Amazon warehouse in South Carolina meets the physical presence criteria, according to SC REVENUE RULING #14-4.
Sellers who have crossed SC's economic nexus threshold for $100,000 in the previous or current calendar year, then you will need to register for a South Carolina sales tax license.
  • If you've imported your sales across all platforms into your TaxJar account, you can determine if you have economic nexus in the state by running the Sales & Transactions Checker.

If you do not meet any of the criteria that creates nexus in South Carolina, you won't need to register for a sales tax license in this state.

I have already registered for a license in South Carolina but all of my sales are Marketplace-only sales. Should I cancel my existing registration?

No. If you are a marketplace seller who has already registered due to nexus (Physical, economic, or otherwise) you should remain registered, according to the DOR.

Do I need to collect taxes on my South Carolina sales on other platforms?

Yes--if you have nexus in the state (physical, economic or otherwise) and you make sales to customers in South Carolina on platforms outside of the marketplace that is automatically collecting and remitting, you will also need to collect tax on your end on the South Carolina orders that are processed on the other platforms.

Do I still need to file returns in South Carolina?

Yes--once you register for a license, you will be required to file a return based on the frequency the state has assigned you.
  • If you've previously registered, the state expects you to remain registered and continue to file returns.
  • If your only sales in the state are through a Marketplace Facilitator that collects sales tax on your behalf in this state, you will need to file “zero tax due” Sales Tax returns. Sellers in this scenario can contact the DOR to request a move to a Quarterly or Annual frequency instead of a Monthly frequency. (Before doing this, you will need to confirm with the marketplace that they are collecting and remitting on your behalf.) 

I still need to file returns in South Carolina. How do I do this without paying double tax on the sales that were collected and remitted by my Marketplace?

When you file, you'll need to deduct your Marketplace Sales as “sales where tax collected by marketplace operator” on the state's return form.
  • If all of your sales are Marketplace sales, once you deduct the marketplace sales, you will need to file a $0 return.
  • If you make sales on other platforms in addition to the Marketplace, you'll need to make sure you remit the tax you collected for those sales when you file.
  • If you're enrolled in AutoFile for South Carolina, our system will handle the Marketplace sales deduction process automatically.

How does this affect my TaxJar Report for South Carolina?

Your TaxJar Report for South Carolina has been updated to reflect the sales that had tax collected and remitted by Etsy and Amazon.

  • You'll see this change in South Carolina sales tax Reports for periods starting in February 2019 and moving forward.
  • The marketplace sales totals in this Report are now called out in the Marketplace Sales row of the Report.
  • We will make changes to your South Carolina Report to reflect sales that had tax collected and remitted by Walmart in early June 2019.