Louisiana was expecting great things once a 5-4 majority on the U.S. Supreme Court opened the door in 2018 to levying taxes on sales made over the Internet by out-of-state vendors. But the results exceeded those expectations.
Louisiana pulled in $150.4 million in sales taxes during the first six month the collections system has been fully operational, Renee E. Roberie, executive director of the Sales and Use Tax Commission for Remote Sellers told her board last week.
“It really is a lot,” Roberie said, repeating what her board members exclaimed when told during video conference the amount of remote sales tax receipts between July 1 and Dec. 31, 2020.
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Fiscal notes attached to the enabling legislation in 2018 and 2019 couldn’t really estimate how much the new system would bring in, coming only as close “approximately $1 million per quarter,” based on remittances from catalog sales. But that predecessor tax, called the direct marketers’ tax, collected less than $150 million over a decade’s time.
Once online sales started to proliferate nationally, Louisiana consumers were supposed to report their purchases and remit their sales taxes. But that rule wasn’t closely followed. Vendors with store locations within Louisiana did collect taxes on online sales.
Everything changed once the Supreme Court in 2018 allowed states to collect sales taxes from online vendors without a presence in their state.
Louisiana is one of the states that can begin collecting taxes on retail sales over the internet after a Thursday ruling by the U.S. Supreme Court.
Louisiana legislators passed a string of laws to set up the commission, which came up with the nuts-and-bolts system for tracking purchases, collecting sales taxes, and remitting the proper amounts to the parish where the purchase was made.
In addition to a state sales tax rate of 4.45 cents of every dollar of the purchase price, vendors also have to collect the local sales taxes, which vary from parish to parish. For instance, Jefferson Parish charges 4.75% percent, which when added to the state’s take means sales tax rate of 9.2% of every dollar purchased is tacked onto the sales price. Just across the 17th Street Canal, Orleans Parish charges a quarter of a penny more for a 9.45% effective sales tax.
The Remote Sales Tax Commission on Wednesday distributed to parish and local governments their portion of the $35.2 million in tax collections on sales made in December. The monies were due from the vendors in January along with the paperwork filed and checked before the commission could release the money locally.
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“I have no idea what the next six months will bring,” Roberie said.
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