2011 Askew Award Winner

Recipient: Sylvan D. Proser

Project Title: No Title

Project Description: This project focused on an evaluation of the efficiency and effectiveness of the state’s collection efforts of sales and use tax owed by taxpayers as a result of e-commerce activities. States (including South Carolina) are losing billions of dollars annually. Sylvan reviewed the exponential increase in lost revenues over the last decade and suggested various ways to address the situation. In South Carolina, total state and local sales and use taxes due on ecommerce rose from $315 Million in 2007 to a projected $495 Million by 2012. Approximately 75% of those taxes actually due are collected. Thus, in 2010 approximately $280 Million will be collected. This will reflect a loss of $95 Million. By 2012, the projected loss will be $125 Million. The total losses have been increasing at approximately 10% per year since 2007. Thus the projected loss in 2017 will be nearly $200 Million from e-commerce. Sylvan researched several possible approaches to remedy the situation. These approaches included administrative form changes, adjusting tax tables, taxpayer education, increased enforcement, and various legislative approaches. These approaches were presented detailing the advantages and disadvantages of each and the likelihood of action in the current political environment. His analysis was thorough, comprehensive and well-documented. His project will serve as an outline of how the state should address this increasingly complex issue, and his suggestions for administrative remedies could result in several million dollars in increased revenue collections.