You may get an unpleasant surprise in your email inbox this week. Thousands of South Carolinians are being notified of taxes they owe on items they bought from online retailer Amazon.com.
The state calls it a use tax, which means it's a sales tax levied on items bought outside the state.
Amazon shoppers in South Carolina are being notified of use taxes they owe on items they purchased in 2011, but there's a twist that may make those customers think they can get away with not paying it.Elaine Wheaton of Murrells Inlet said it was a shocker when she checked her e-mail a few days ago. Amazon.com told her she owed the state use tax on a tablet computer she bought last year.
The message said Amazon is notifying its customers about the tax owed, but does not have to notify the Department of Revenue about it.
"If Amazon is not reporting to the state of South Carolina, I have an idea a lot of people are not going to pay this," Wheaton said.
Wheaton said she'll be honest and report the tax on her state income tax form 1040, but she thinks it was deceptive of Amazon not to notify customers of the tax when they purchased items. "We do a lot of purchasing from Amazon. Now I might reconsider not using them."
The use tax is nothing new. It's been around in South Carolina since 1951, but Myrtle Beach tax accountant James McIlrath said many people who buy items online aren't aware of the tax. In fact, avoiding the sales tax is a big reason they buy things online.
"I hear that all the time, that people think they're getting a 5 percent or even in Myrtle Beach it's a 9 percent discount on the product they're buying," McIlrath said.
McIlrath said online retailers that have stores in South Carolina, like Barnes and Noble, must collect the sales tax themselves. But Amazon got a special deal, when they announced plans to build a distribution center in the state.
In exchange for creating thousands of jobs, they don't have to collect the use tax until 2016. They just have to notify customers about it.
McIlrath advises, to be on the safe side, just go ahead and pay the tax. "That's the best way to do it, that's what the law is, yes."
If you got one of those emails but thought it was spam and deleted it, state revenue officials say it's your responsibility to contact Amazon and ask them to re-send the message.
A study showed South Carolina loses more than $110 million a year from unpaid use taxes.
