Will Louisiana See a Simplified Sales Tax Code in 2019?

Date: October 02, 2018

NFIB/Louisiana has long been a vocal advocate for cleaning up and streamlining the state’s sales tax code, with centralized sales tax collection being the ultimate goal. Now, NFIB/LA will sit on the state commission tasked with doing exactly this.

On Oct. 1, the Louisiana Sales Tax Streamlining and Modernization Commission began meeting. Over the past couple of years, the commission worked to review the hundreds of sales tax exemptions and the variances between the state and local sales tax codes. Currently, Louisiana is one of three states in the country that has hundreds of collectors, making it overly burdensome on small businesses.

NFIB/LA is working with legislators to pass a centralized sales tax collection method in the 2019 session. Under this plan, the sales tax code will be cleaned up, streamlined, and centralized so that Louisiana can be in compliance with the Wayfair decision and be able to collect all available sales tax due to the state.

As a refresher, per the Tax Foundation, “The U.S. Supreme Court in South Dakota v. Wayfair this year ruled that a state may require collection of sales tax by out-of-state internet retailers who sell into the state (‘remote sellers’), so long as the law does not discriminate against or place excessive burdens on those engaging in interstate commerce.

“The Court strongly suggested that a law that follows what we call ‘the Wayfair checklist’ would be constitutional. States can satisfy this checklist by adopting a de minimis threshold, explicitly rejecting retroactive enforcement, and adhering to uniformity and simplification rules in the Streamlined Sales and Use Tax Agreement (SSUTA).”

The news about the Wayfair ruling came amidst Louisiana’s budget and tax special session this summer, but with its numerous tax collection points, Louisiana is currently not compliant with the Wayfair checklist and cannot tax Internet sellers without a change in policy.

This will be one of NFIB/LA’s top priorities in the coming session, but it won’t come without a fight from local governments, who can only say they oppose a centralized sales tax collection because they don’t think the state will get them their money fast enough or they don’t trust state government to give them all of their money. However, local government entities receive subsidies from the state government already, so there is no reason they wouldn’t get their sales tax dollars. This is a classic fight for control by the local governments, yet virtually every other state in the country makes it work.

Related Content: Small Business News | Economy | Louisiana

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