Kimberly Robinson

Revenue Secretary Kimberly Robinson in the moments before the Louisiana Sales and Use Tax Commission for Remote Sellers on Dec. 18, 2019 approved rules for how the state would collect sales taxes from out-of-state, internet sellers.

The procedures for how Louisiana will collect taxes on sales over the internet in two weeks were approved in a 5-2 vote Tuesday.

The directive tells out-of-state website vendors how they can register and when they should start collecting sales taxes.

And for the first time in decades, local jurisdictions will be left out of the sales tax action.

The Louisiana Sales and Use Tax Commission for Remote Sellers voted to collect a flat 8.45 percent of every dollar spent with an internet retailer from another state. Every three months, the state will send about half of those proceeds — 4 percent of the 8.45 percent tax, regardless of what a particular local charges — to the parishes based on population. The rest goes into state coffers.

Charging the sales tax will be voluntary for vendors for another few months — though many already have started collecting the uniform 8.45 percent prior to the official Jan. 1 start date.

Revenue Secretary Kimberly Robinson said once the software that can divvy up all the different local rates is in place, remote retailers will be required to charge Louisiana consumers sales taxes on purchases made over the internet.

Most states have a centralized sales tax collection system, such as the one put in place by the regulations Tuesday for internet sales.

Louisiana is one of the few states where local jurisdictions have the authority to levy and collect their own sales taxes.

Local authorities were given power in the state Constitution to collect sales and use taxes. State courts have held that laws appointing a mandatory agent to collect the taxes from retail stores interfere with that constitutional right. Louisiana is one of the few states that allows local jurisdictions — about 370 of them — to operate pretty much on their own.

School boards, municipal governments, law enforcement, parish police juries and other local taxing authorities rely on those revenues and set their own rates with voter approval. That’s why New Orleans retailers charge 9.45 percent on the dollar for sales and Jefferson Parish collects 9.2 percent.

The complex and decentralized sales tax system is at the heart of criticism that Louisiana would be hard-pressed to come up with procedures simple enough to meet the U.S. Supreme Court standards in June’s Wayfair decision, which allows states to collect sales taxes from retailers in other states.

At Robinson’s insistence, the board adjusted technical definitions – over the objections of some local taxing authorities – that essentially stripped local involvement in collecting sales taxes from website sales.

The procedure now better meets the high court’s simplicity standard, Robinson said.

The state has operated for years under laws that defines who pays and how much based on relationships to companies that do business in the state and other scenarios.

The board decided to define out-of-state, internet vendors based on how much they sold to Louisiana customers.

The law talks about “remote sellers” who have more than $100,000 in sales or more than 200 transactions. The remote seller has 90 days to start collecting sales and use taxes after meeting the threshold, according to the directive.

Centralizing on the state level also allows businesses to file a single monthly tax return for online sales and submit to a single audit, rather than dealing individually with 63 of the 64 parishes — Cameron Parish doesn’t collect a local sales tax — plus scores of local governments, school boards and other jurisdictions.

Three board members affiliated with the Louisiana Department of Revenue — Darlene Allen, Kelli Jumper and Vanessa LaFleur — voted for the new definitions along with Tiffani Delapasse, of the Louisiana Municipal Association, and Donna Andries, of the Police Jury Association.

The directive applies to website and other sales from vendors out of state. But many local authorities see this as a step toward centralizing in-state sales tax collections.

Jeanine Theriot, who represents the Louisiana Sheriffs' Association, voted against approving the new procedures as did Amber Hymel, who represents the Louisiana School Boards Association. Theriot said she wanted to protect the rights of local jurisdictions to collect sales taxes monthly.

And as the proposed wording of the guidance was released only a few hours before the meeting, she wanted more time to digest its import.

During the hearing, Theriot leaned over and quietly asked Robinson if they could postpone the vote.

Robinson said no. “We have to issue these today because we set a date of Jan. 1” to implement internet tax collections, she said.

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Follow Mark Ballard on Twitter, @MarkBallardCnb.