Bill Would Use Online Sales Tax Money for SC Roads - WSPA.com

Jake Mullender works at Elite Framing in Columbia Friday. It lost business to online competitors who don't charge sales tax.Jake Mullender works at Elite Framing in Columbia Friday. It lost business to online competitors who don't charge sales tax.

Bill Would Use Online Sales Tax Money for SC Roads

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Jake Mullender works at Elite Framing in Columbia Friday. The company lost business to online competitors that don't charges sales tax. Jake Mullender works at Elite Framing in Columbia Friday. The company lost business to online competitors that don't charges sales tax.
COLUMBIA, S.C. -

A bill just filed in the South Carolina House would use all the money collected from online sales taxes for roads and bridges in the state. But first, the U.S. Congress would have to pass a law to require all online retailers to collect the sales tax from their customers.

Right now, an online retailer that has a physical presence in South Carolina, like a brick-and-mortar store, has to collect the sales tax. So if you go to walmart.com to buy something, the website will add the sales tax, since Wal-Mart has store locations in the state.

But if you buy something from an online retailer that doesn't have a location here, it won't charge sales tax. You're supposed to keep track of it and pay it on your state income tax return as a "use tax".

But the federal government is considering a bill called the "Marketplace Fairness Act", which would give the states authority to require all online retailers to collect the sales tax at the time of the transaction, regardless of where the online retailer is located.

Rep. Nathan Ballentine, R-Irmo, introduced a bill Thursday in the state House that would send all the money that would be collected from that additional sales tax to roads and bridges in the state.

In a news release, Rep. Ballentine said, "Momentum appears to be building in the US Capitol to pass the Marketplace Fairness Act.  Our bill directs any funds sent back to South Carolina as a result of this new federal legislation specifically to our State's infrastructure needs.  South Carolina's commerce depends on healthy businesses and roads and, if and when this federal bill passes, we will be ready."

He says a conservative estimate of how much money his bill would bring in, if the federal bill becomes law, is $70 million a year.

Mark Johnson, owner of a framing business in Columbia, would be glad to see the bill that's now in Congress pass. "We used to sell a lot of prints and posters that we would order from companies around  the country; come in, frame and then pay state sales tax on," he sales. But he had to give up that part of his business because he couldn't compete with online retailers that didn't have to charge the sales tax.

You may remember that online sales taxes were a hot topic in South Carolina two years ago when the state was trying to convince online retailer Amazon to build a distribution center in the state. Because that would give the company a physical presence in the state, it would have to start collecting the sales tax on orders from South Carolinians.

In order to close the deal, state lawmakers agreed not to require Amazon to collect sales taxes until 2016. Until then, the company agreed to send notices to every South Carolina customer listing their online purchases for the year and reminding them that it's their responsibility to pay those sales taxes themselves on their state tax returns.

Rep. Ballentine says, "It's not a new tax on individuals. It's just simply a cleaner way to collect that. And when and if that passes D.C., I want to make sure that we get the revenue for those roads."

 

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