South Carolina is telling Amazon to pay up – about $500 million, which is how much the state estimates it will lose over the next five years if Amazon doesn’t start collecting sales tax on third-party sales.
Sales from third-party merchants make up about half of all Amazon’s sales, but Amazon only collects taxes on sales of its own products. South Carolina claims that it lost $57 million in sales tax last year due to Amazon’s failure to collect from third-party sales. Amazon says that tax collection should be the responsibility of the seller, but the state disagrees and has filed a motion to require Amazon handle the money owed.
Currently, this gives an unfair price advantage to third-party sellers on Amazon over brick-and-mortar stores, who collect sales tax on all products sold.
