South Carolina – Amazon Faces A Tax Fight That Could Change How Online Sellers Do Business

CNBC – TECH
by Eugene Kim
August 15, 2017

President Trump has repeatedly attacked Amazon and its CEO Jeff Bezos for dodging financial obligations, tweeting as recently as June that the company avoids “paying internet taxes.”

While the president’s claims have remained vague, at least one state is now making a similar allegation — and providing some substance to back it up.

In June, South Carolina filed a complaint alleging that Amazon failed to collect taxes on sales made by third-party merchants on the company’s marketplace. These are products where Amazon is not the seller, but rather is connecting other businesses to consumers and providing the payment processing for the transaction as well as some customer support.

The state claimed that for the first quarter of 2016, Amazon owes $12.5 million in taxes, penalties and interest, an amount that “will continue to accrue until this matter is resolved.”

In the complaint, obtained by CNBC, South Carolina’s Department of Revenue said Amazon is responsible for collecting taxes on behalf of the businesses that used the marketplace to sell products to residents of the state. A spokesperson for the state declined to comment on why the audit was limited to that three month period.


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