Louisiana, Remote Sales, and the Great Sales Tax Debate
- Dec 19, 2012 | Gail Cole
Louisiana does not have a uniform tax collection system. Individual parishes handle the collection of local sales tax, and there are 64 parishes in the state. In addition, there are often "numerous taxing districts" within one parish. "It is time," say some, for the state to "come into the 21st Century."
According to the Louisiana Association of Tax Administrators (LATA), sales tax questions should be addressed "directly to the local tax collector of that parish." This is also true with respect to exemptions, many of which are optional. For those that are optional, "the parish must pass the resolution in order for it to apply to its portion of the combined local taxes in the parish. Otherwise it will be only partially exempt at the local level." People are advised to "contact the local tax collectors individually to determine if" exemptions apply. That seems prudent.
This system presents inherent challenges to businesses with sales in multiple parishes, and particularly for remote sellers. Jason DeCuir, assistant secretary of the Louisiana DOR, notes that the "complexity of the administration of sales tax collection is a burden on retailers under the current system." Recognizing this, the Louisiana Department of Revenue "is soliciting input on sales tax collection ideas… ." DeCuir has said he hopes to engage state and local officials in a "very healthy discussion" of the matter. The question to be examined is, "What can be done to improve collections?" (The Advocate)
Some local officials are concerned that the state may "push to take sales tax collection away from parishes and put the process in the hands of the state." To head off such action, both Tangipahoa Parish Council and St. Helena Parish Police Jury have "passed resolutions opposing any attempt by the state to take over the sales tax collection job." Representatives from the Louisiana Municipal Association remind that sales tax revenue is "vital" to local governments.
Doug Baker, the communications director of the state Department of Revenue assures that there "has been no public discussion of the state taking over sales tax collection." Baker says that such a discussion would be premature. John LeBlanc of the Louisiana Association of Business and Industry agrees.
That said, LeBlanc admitted that discussion has emerged around "having a uniform sales tax commission to help when taxpayers have issues that cross parish lines." He stressed that '[c]ollection of sales taxes from Internet sales will require a single collection point in a state."
Remote sellers are not currently required to collect sales tax in a state unless they have nexus there, pursuant to the 1992 Supreme Court ruling from Quill Corp. v. North Dakota. The federal government has yet to pass legislation that would allow states to collect sales tax from remote sellers without nexus, although several bills are floating around Capitol Hill.
Regardless of what happens in Washington, folks like Mike Olivier of the Louisiana Committee of 100 for Economic Development, think the time has come to "improve the efficiency of our state and local government tax systems." Such a move, he said, can only "have a positive effect on existing businesses and new businesses coming to Louisiana."