Amazon will cost the State of South Carolina $500 million in sales tax over the next five years, the state's tax authority said in a motion filed this week, CNBC reports.
Why it matters: This is yet another example of states getting serious in their effort to collect sales taxes on cross-state e-commerce transactions. The failure to do so is costing states more than $1 billion per year and contributing to persistent state and local budget constraints even as economic growth accelerates.
What the law says: As it stands, retailers aren't required to collect sales taxes on goods sold in states where they don't have a physical presence, though customers still technically owe (but rarely pay) these duties.
What's next: States are challenging this standard in jurisdictions around the country, with the most closely watched case being a South Dakota petition filed earlier this month to the Supreme Court, asking it to review whether it can constitutionally require retailers in other states to collect South Dakota sales tax.
