Are you ready to pay more to shop on the Internet? Ready or not, lawmakers in Baton Rouge are making that decision for you. Besides the many other taxes on the agenda, the Legislature just passed House Bill 30, which would force most out-of-state online retailers to collect state sales taxes on whatever they sell to us. In other words, it’s an online sales tax.
The Internet used to be an open and convenient marketplace for good deals and products we couldn’t find close to home. Slapping sales taxes on our online purchases will put an end to that.
Online vendors doing more than $50,000 of business in Louisiana will be required to charge us an 8 percent sales tax. We’ll be sending more of our hard-earned money to the state and our parishes, even though some Louisianians already pay a combined sales tax rate as high as 11 percent on goods at the store.
We also will likely be paying more for the goods and services themselves. That’s because this online sales tax requires sellers to spend more time and money keeping track of the taxes they collect and send back to Louisiana. Keeping track of the rules and regulations for local sales taxes already is 60 percent of what small businesses spend on compliance, so any new tax collection responsibility will be made up for with higher prices.
This new burden might actually scare many businesses away from doing business in Louisiana. Although big retailers like Amazon have no qualms with collecting this new tax, small and midsize businesses would have a lot more trouble. In return for selling to us, they could face higher costs and be at risk of audits from our Department of Revenue. Sites like eBay and Etsy expect a similar dilemma for their sellers.
We shouldn’t be surprised if we start seeing online disclaimers that say “Sorry: no Louisiana buyers.”
Worse yet, this new law would give us an inherent economic disadvantage compared with other states. Most states have no Internet sales taxes, and adding our state to the small list of those where this complication exists would make Louisiana a less attractive location for business.
Unsurprisingly, this move is unpopular — 60 percent of Louisianians polled last month said they opposed such a tax. And the U.S. Supreme Court already has ruled that taxes like this are unconstitutional.
So why are lawmakers moving forward with it? Adding yet another tax burden to our lives won’t help improve Louisiana’s quality of life and economy — it’ll just make things cost more.
Louisiana state director, Americans for Prosperity