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Attention Online Shoppers

Taxing Internet sales?


  Out-of-state retailers that sell online goods and services to consumers in Louisiana would have to start collecting and paying sales taxes to local governments and the state, under legislation pending before Congress. On Feb. 14, U.S. Sen. Mary Landrieu, chair of the Senate Committee on Small Business and Entrepreneurship, joined 53 other members of Congress in introducing the proposed Marketplace Fairness Act. She is the only lawmaker from Louisiana on the co-sponsor list.

  Companies that retail digitally and have a storefront presence in Louisiana already remit local and state sales taxes. But those that operate entirely outside the Bayou State or entirely online get off the hook. The proposed law is not a mandate, however; it merely authorizes states to force out-of-state retailers to collect sales taxes. The bill would exempt businesses with less than $1 million in annual domestic sales.

  Landrieu says the bill would help level the playing field between traditional retailers and online businesses. "Small retailers in Louisiana and across the nation are being put at a disadvantage against large, online businesses because of the nature of our tax code," said Landrieu, a Democrat. "This legislation is simply about fairness and leveling the playing field for all our businesses."

  Officials with Gov. Bobby Jindal's administration said they would be closely tracking federal legislation this year related to Internet sales taxes. That's because Jindal is proposing an elimination of individual and corporate state income taxes in exchange for an increase in the state sales tax, which currently is 4 percent.

  Many local governments in Louisiana impose at least another 4 percent in sales taxes, giving Louisiana the third-highest overall sales tax rates in the country. The overall rate in Orleans and St. Bernard parishes is 9 percent; in Jefferson it's 8.75 percent. Should Congress pass some version of the Marketplace Fairness Act, it could help Jindal accomplish the goal of keeping his plan revenue neutral.

  The National Conference of State Legislatures estimates that $800 million in Louisiana sales tax revenues go uncollected by Internet vendors each year. Another study by the University of Tennessee found that Louisiana lost out on closer to $440 million in online sales taxes in 2012. — Jeremy Alford

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