Amazon is pushing back against a recent court ruling in South Carolina which states that the online seller owes $12.5 million in sales tax.
Founder of Amazon, Jeff Bezos is pushing back against the court ruling. The $12.5 million is not a huge dent in the $2.3 billion in profit that Amazon made last quarter, but accepting the court ruling would establish a legal precedent. This legal precedent could lead to a slipper slope in which other states start charging Amazon sales tax for good sold within the state.
“If other tax authorities were successfully to seek additional adjustments of a similar nature, we could be subject to significant additional tax liabilities,” said Amazon in a statement.
Initially, South Carolina had granted Amazon a five year grace period on sales tax that started in 2011. However, with that grace period over, the S.C. Department of Revenue started receiving input from customers saying that they were being charged for sales tax on certain items sold in South Carolina but not others. This led to an audit and the amounting fine of $12.5 million in sales tax.
Amazon does not believe that it is responsible for collecting sales tax since it is not the seller but merely a platform for the seller. However, others believe that Amazon is so involved in the sales process that the company takes on the role of a seller.