You can click here to read exactly what the South Carolina Department of Revenue has to say about what constitutes the South Carolina sales tax link.  California uses the presence of light factors to establish a link in the state. A taxpayer whose sales, real estate or indemnities are paid in the State above the indexed thresholds of the State is deemed to be operating in the State. The factor-California nexus thresholds for fiscal 2020 are above $610,395 in revenue, or 25% of total revenue. Properties over $61,040 or 25% of total ownership; and compensation of more than $61,040, or 25% of total compensation. Cal. Rev. & Tax. Code § 23101(b). Summary: Distance sellers (e.g.
Marketplace, online, catalog or mail order) must collect sales tax in South Carolina if their gross sales exceed $100,000 in calendar years 2017 or later. Similarly, the same rules apply to any affiliate who assists the distance seller in selling, storing, distributing, collecting payment or otherwise in relation to the distance seller. South Carolina considers a seller to be physically connected if you have one of the following in the state: A distance seller whose gross revenue from the sale of tangible personal property, electronically transmitted goods, and services shipped to South Carolina exceeds $100,000 in the previous or current schedule has an economic connection to the state. Distance sellers who exceed the threshold are responsible for obtaining a retail license and remitting sales and use tax in South Carolina. South Carolina expands COVID-19 link and withholding income tax for teleworkers If you need to register as soon as you exceed the threshold: The first day of the second calendar month following the establishment of the economic context Businesses with a connection to South Carolina must register with the South Carolina Department of Revenue and collect a fee, collect and remit the appropriate tax. Generally, a business has a connection in South Carolina if it has a physical presence there, such as a retail store, warehouse, inventory, or regular presence of salespeople or circuit agents. However, out-of-state sellers can also make a connection in the manner described below. South Carolina Nexus for Out-of-State Sellers The South Carolina Department of Revenue provides written guidance on sales and use tax activities in Advisory Opinion 14-4 (February 2016). These include, but are not limited to: Distance sellers and market intermediaries need to work with the right partner to ensure they stay current and meet all the requirements of the economic context, even if regulations change. You need to collect sales and use taxes in South Carolina if you have a link there. There are two ways sellers can be tied to a state when it comes to nexus: physical or economic.
Physical connection means having a sufficiently tangible presence or activity in a state to earn sales tax payment in that state. Economic context means exceeding a state`s economic threshold for total revenue or the number of transactions in that state. Affiliate Link If your business has ties to businesses in South Carolina, including affiliates, it may have a connection. Department of Revenue guidelines state that the link is made when an out-of-state business is affiliated with a business that sells personal items or tangible services to customers in South Carolina, and the state subsidiary does one of the following: We have already reported constitutional issues relating to: if the imposition of a relationship based solely on the presence of certain employees in the state due to COVID-19 violates both the due process clause and the commercial clause of the U.S. Constitution. These questions remain relevant when considering the different approaches taken by states to examine whether workers temporarily working in the state due to COVID-19 are creating a link. South Carolina Sales Tax Resources: For more information on the economic context in South Carolina, please contact our team. Sovos` interactive sales tax links map is another great resource with real-time updates on each state. Distance sellers who establish a link in South Carolina on or after October 1, 2018, must register and begin collecting and remitting sales and use tax on or after the first day of the second calendar month following the establishment of the economic link. Taxes, penalties and interest are not determined by the ministry until the telemarketer is required to register and collect taxes (on the first day of the second calendar month following the establishment of the economic link).