Distribution facility nexus; criteria for and duration of provisions; use tax notification and payment

# (A)

Notwithstanding another provision of this chapter, owning, leasing, or utilizing a distribution facility, including a distribution facility of a third party or an affiliate, within South Carolina is not considered in determining whether the person has a physical presence in South Carolina sufficient to establish nexus with South Carolina for sales and use tax purposes.

# (B)

For purposes of this section:

# (1)

"distribution facility" means an establishment where shipments of tangible personal property are stored and processed for delivery to customers and no retail sales of the property are made. The definition of "distribution facility" provided in Section 12-6-3360(M)(8) allowing limited retail sales at such a facility specifically do not apply with respect to a "distribution facility" as defined for purposes of this section;

# (2)

"affiliate" means a person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with another person;

# (3)

a person controls another person if that person holds a fifty percent ownership interest in the other person.

# (C)

This section only applies to either a person who, or a person who has an affiliate who:

# (1)

places a distribution facility in service after December 31, 2010, and before January 1, 2013;

# (2)

makes, or causes to be made through a third party, a capital investment of at least one hundred twenty-five million dollars after December 31, 2010, and before December 31, 2013;

# (3)

creates at least two thousand full-time jobs and with a comprehensive health plan for those employees, after December 31, 2010, and before December 31, 2013. For purposes of this item, "full-time" and "new job" have the same meaning as provided in Section 12-6-3360; and

# (4)

after meeting the requirements of item (3), maintains at least one thousand five hundred full-time jobs and with a comprehensive health plan for those employees until January 1, 2016.

# (D)

This section no longer applies on the earlier of:

# (1)

January 1, 2016;

# (2)

when the person fails to meet the requirements provided in subsection (C) of this section; or

# (3)

the effective date of a law enacted by the United States Congress that allows a state to require that its sales tax be collected and remitted even if the taxpayer does not have substantial nexus with that state.

# (E)

# (1)

A person to whom this section applies who makes a sale through the person's Internet website shall notify a purchaser in a confirmation email that the purchaser may owe South Carolina use tax on the total sales price of the transaction and include in the email an Internet link to the Department of Revenue's website that allows the purchaser to pay the use tax. The notice must include language that is substantially similar to the following:
"YOU MAY OWE SOUTH CAROLINA USE TAX ON THIS PURCHASE BASED ON THE TOTAL SALES PRICE OF THE PURCHASE. YOU MAY VISIT WWW.SCTAX.ORG TO PAY THE USE TAX OR YOU MAY REPORT AND PAY THE TAX ON YOUR SOUTH CAROLINA INCOME TAX FORM."

# (2)

The Department of Revenue shall cooperate with any person to whom this section applies and provide the person with the information and assistance necessary to comply with the provisions of this subsection and the means to link to the applicable portion of the department's website. The department shall develop the webpage required by item (1) and develop a means to allow the purchaser to pay any required tax through the webpage. The department shall include on the webpage a table of the various sales tax rates of the State by location that permits the person to calculate the tax based on the total sales price and delivery location.

# (3)

(a) A person to whom this section applies also shall by February first of each year provide to each purchaser to whom tangible goods were delivered in this State a statement of the total sales made to the purchaser during the preceding calendar year. The statement must contain language substantially similar to the following:
"YOU MAY OWE SOUTH CAROLINA USE TAX ON PURCHASES YOU MADE FROM US DURING THE PREVIOUS TAX YEAR. THE AMOUNT OF TAX YOU MAY OWE IS BASED ON THE TOTAL SALES PRICE OF [INSERT TOTAL SALES PRICE] THAT MUST BE REPORTED AND PAID WHEN YOU FILE YOUR SOUTH CAROLINA INCOME TAX RETURN UNLESS YOU HAVE ALREADY PAID THE TAX."
The statement must not contain any other information that would indicate, imply, or identify the class, type, description, or name of the products purchased. Any information that would indicate, imply, or identify the class, type, description, or name of the products purchased is considered strictly confidential.

(b) The statement may be provided by first class mail or email.