The necessity to handle the issue of sales tax for online purchases has grown as more and more trade goes online. The notion of a marketplace facilitator has developed as one potential remedy. This article will examine the definition of a marketplace facilitator and how it relates to South Carolina’s sales tax.
A company that offers a platform for sales by third-party vendors is known as a marketplace facilitator. Marketplace facilitators like Amazon, eBay, and Etsy are a few examples. In these situations, the facilitator handles payment processing and other procedures while also providing the infrastructure needed for sellers to list and sell their goods. The facilitator might even take care of delivery and customer service in some circumstances.
Before the emergence of online marketplaces, it was quite simple to identify the location of a sale and, thus, which state’s sales tax should be charged. However, it can be more challenging with markets. For instance, a seller in California might use an online marketplace to offer a product to a customer in South Carolina. It might not be immediately obvious in this situation which state’s sales tax should be used.
Some states have put in place marketplace facilitator laws to combat this problem. According to these legislation, the facilitator is obligated to gather and send sales tax on behalf of the third-party merchants. In other words, the facilitator is in charge of gathering and remitting the proper sales tax if a seller sells a product through a marketplace.
One of the states with a marketplace facilitator statute is South Carolina. Marketplace intermediaries will have to gather and send sales tax on behalf of their third-party merchants starting on October 1, 2019. This means that, for instance, if you sell things on Amazon, Amazon is in charge of obtaining and disbursing the sales tax for those transactions.
South Carolina levies a 6% sales tax. Local governments may, however, tack on additional sales taxes, which might differ greatly. For instance, Charleston has a 9% overall sales tax rate. This includes the 6% state sales tax, the 1% municipal sales tax, and the 2% neighborhood hospitality tax.
In conclusion, it’s critical to comprehend the idea of a marketplace facilitator and how it relates to sales tax if you’re a seller doing business through an online marketplace. Fortunately, the marketplace facilitator statute makes it quite simple for you to comply with the state’s sales tax regulations if you are selling things in South Carolina. Keep an eye out for any adjustments to local sales tax rates as they might vary greatly and have an impact on your overall tax obligation.