TEI filed an amicus brief with the South Carolina Court of Appeals in Amazon Services, LLC v. South Carolina Department of Revenue on January 7, 2021. The case involves South Carolina’s attempt to hold Amazon Services liable for sales tax on 2016 transactions between third party retailers and their South Carolina customers because those sales took place over Amazon Service’s online platform. The South Carolina legislature amended its statutes in 2019 to expressly impose such responsibility on marketplace facilitators, and made these amendments prospective only.
TEI’s brief argued South Carolina’s pre-2019 statutes did not address the rights, responsibilities, or liabilities of third-party retailers and marketplace facilitators, nor did they inform marketplace facilitators of the Department of Revenue’s intent to hold marketplace facilitators responsible for tax on transactions taking place over their platforms. Such efforts by the Department would have enabled marketplace facilitators to mitigate 100 percent of their liability for these taxes by collecting them from consumers and to avoid double collection of tax on the same transaction. TEI argued that it would offend principles of sound tax policy to allow taxing authorities to hold marketplace facilitators liable for the tax when that taxing authority failed to undertake these fundamental tax administration responsibilities.
TEI's brief was prepared under the aegis of TEI's State and Local Tax Committee, whose chair is Michell Rodriguez. TEI Tax Counsel Pilar Mata coordinated the preparation of the brief and was its principal author.