In 2016, Louisiana passed a legislative attempt to finally collect the largely-unpaid internet sales tax that had been eluding the state for many years. You know, the millions of dollars of purchases being made online by Louisiana residents, which had virtually no oversight until the newly-elected Governor John Bel Edwards made it one of his top priorities in his first special session. While online sales through companies that had a physical presence in this state (i.e. Wal-Mart, Best Buy) were bound by law to charge sales tax on internet purchases, any company that you could not physically visit in the state of Louisiana were not. The world’s number one online retailer - Seattle, WA-based giant Amazon.com, became the first company to comply with the new regulations. Just order something from them and you will see that the tax is indeed added, just as it would be at the checkout of your favorite supermarket.
But what about the specialty internet stores and big sellers on eBay, whose companies take in more than $50K a year? While they may appear to be exempt from charging their customers sales tax, they will now be held responsible for helping the state to receive that revenue after all. As of Jan. 1, online retailers are required by Louisiana law to notify their customers of sales tax that is owed on all purchases during the preceding calendar year. Haven’t received your personalized tax statement from Overstock.com? Don’t worry, you will, as these companies will have until Jan. 31 to mail the letters. You may have already received emails from retailers concerning this change. It’s better to get used to it because this is your internet shopping experience from here on out.
Although Louisiana law has long-required shoppers to report online purchases where state sales tax was not charged on the individual’s income tax returns and the amount of tax that should have been paid (in the form of a “use” tax), let’s just say that there hasn’t been a lot of compliance - up until now. Consumers will receive itemized lists of purchases, dates, and amounts. According to the revenue department, the letters will include “a clear statement that Louisiana use tax may be due,” and the envelopes marked with “Important Tax Document Enclosed,” unless the consumer agreed to be notified electronically. Anyone who thinks that they can ignore such a serious document, just know that similar reports will be sent from the retailer to the revenue department, including total purchase amounts. This document will, of course, be cross-examined with your tax return. While many of my fellow residents are sure to be bummed by these new, all-inclusive tactics employed by Louisiana’s Dept. of Revenue and our state legislature, just look on the bright side - not only do you not have to live in the shadows anymore, you can still shop tax free … until it’s taken from your refund the following year!
