Approved by the Ways and Means Committee on Monday with no objection, the bill would also force online retailers to notify customers of their obligation to self-report, which would be accomplished with a simple document that would arrive inside shipping boxes and alongside purchases.
The bill was introduced by Speaker Pro Tem Walt Leger, D-New Orleans, who was also the author of Act 22 from the first special session earlier this year. That act, passed by the House and Senate and endorsed by the governor, created a framework for collecting Internet sales taxes and Leger is now trying to build on it with HB 1121.
Act 22 simply requires out-of-state online retailers with contract affiliates in Louisiana to collect and remit sales taxes. Local governments and the state are splitting the collected 8 percent sales tax.
“I think we all knew at the time this wouldn’t solve the problem entirely,” said Leger, noting sales taxes have always been due on such purchases, but there were collection challenges.
The new system has only been in place for roughly a month, but Leger sees an opportunity to expand on it by implementing a nexus model from Colorado that has been upheld by the 10th Circuit Court of Appeal.
Like Act 22, Leger’s HB 1121 would only apply to remote retailers that do $50,000 worth of business in Louisiana annually. Unlike Act 22, it doesn’t matter if they have contract affiliates here — so it casts a wide net and would capture major Internet players like Amazon.
The legislation would require online retailers to submit to the Department of Revenue a list of all customers who have made purchases greater than $250.
It has some bipartisan support, with Rep. Pat Connick, R-Metairie, deciding not to file a similar measure and throwing support to the bill by Leger.
In Colorado, Amazon recently decided to stop sending the state its list of customers and has begun collecting sales taxes on behalf of the state. Some studies have suggested Louisiana could receive up to $75 million annually if just Amazon, and no other online retailers, do the same here.
“It’s hard to even know how much money it would bring in, but this is a step in the right direction,” said Leger.