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v. North Dakota decision became the biggest threat to the stability of South Carolina’s tax system — well, other than the Legislature itself, which loves few things more than eroding our tax base by doling out special tax breaks to special interests. It was the tsunami we saw coming, as the infant internet suddenly became the nation’s shopping mall, thanks in no small part to tax-free shopping. Online purchases skyrocketed from zero to $5 billion in South Carolina, and kept rising, as the luxury of having the world at our fingertips combined with the convenience of buying it on our phones and that thrilling little bonus of getting away with something when we didn’t have to pay sales taxes. Yet our Legislature did nothing to reduce its growing impact. The internet exemption was probably our most unfair tax exemption — no small thing in a state that charges the same sales tax on a used Kia as a Learjet. Granted, the Legislature couldn’t make companies without a physical presence in South Carolina collect our 6 percent sales tax. And it probably wouldn’t be cost-efficient to go harder after purchasers, who are legally required to pay a use tax on their untaxed purchases via their income tax forms. Still, lawmakers could have done other things to blunt the impact of untaxed e-commerce.
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