JerryBellune@yahoo.com

Amazon took on South Carolina in a high-stakes sales tax fight this week.

$12.5 million in taxes and 2,000 jobs are at stake for the online retailer and its Lexington County-based distribution center.

In question is if the state can require Amazon to collect sales taxes on other merchants’ products sold here through Amazon.com.

The SC Department of Revenue wants almost $12.5 million in taxes, interest and penalties, the Charleston Post and Courier reported.

State officials estimate this could cost up to $500 million in tax revenue by 2021.

Amazon argues it’s not responsible for taxes for other merchants in SC – yet it already does it in 8 states.

Amazon made $10 billion in profits last year on $233 billion in sales.

The fight this week is in the SC Administrative Law Court that handles disputes with state agencies.

The sales involve items sold on Amazon but not by Amazon. The online retailer says it brings consumers and merchants together and handles shipping and payment.

The state claims Amazon is the seller because it controls much of the process.

In negotiations to come here in 2011, Amazon resisted paying sales taxes.

Lexington County officials played a key role in negotiating 5 years tax free for a $125 million investment and 2,000 Amazon jobs.

As Amazon expanded, it collected taxes where required on what it sells itself.

The Department of Revenue checked on Amazon after consumers reported being charged sales tax on some items but not others.

The agency found almost $9.6 million in other retailers’ sales with $2.9 million in interest and penalties.

Amazon fears the case could inspire copycat claims and create tax battles for other consumer websites including eBay and Etsy.