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Regular Session, 2012
HOUSE BILL NO. 1114
BY REPRESENTATIVES PATRICK WILLIAMS AND BARRAS
TAX/SALES & USE: Defines "dealer" for sales and use tax
AN ACT1
To amend and reenact R.S. 47:301(4)(h) and 302(K)(5) and to enact R.S. 47:301(4)(m),2
relative to sales and use tax; to provide with respect to dealers; to provide for certain3
definitions; to provide a method for reporting and remitting taxes by certain dealers;4
and to provide for related matters.5
Be it enacted by the Legislature of Louisiana:6
Section 1. R.S. 47:301(4)(h) and 302(K)(5) are hereby amended and reenacted and7
R.S. 47:301(4)(m) is hereby enacted to read as follows: 8
§301. Definitions9
As used in this Chapter the following words, terms, and phrases have the10
meaning ascribed to them in this Section, unless the context clearly indicates a11
different meaning:12
* * *13
(4) "Dealer" includes every person who manufactures or produces tangible14
personal property for sale at retail, for use, or consumption, or distribution, or for15
storage to be used or consumed in a taxing jurisdiction. "Dealer" is further defined16
to mean:17
* * *18
(h) Any person engaging in business in the taxing jurisdiction. "Engaging19
in business in the taxing jurisdiction" means and includes any of the following20 HLS 12RS-2293 ORIGINAL
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methods of transacting business: maintaining directly, indirectly, or through a1
subsidiary, an office, distribution house, sales house, warehouse, or other place or2
location of business, or by having an agent, salesman, independent contractor, or3
solicitor operating within the taxing jurisdiction under the authority of or through an4
agreement with the seller or its subsidiary irrespective of whether such place of5
business, agent, salesman, or solicitor is located in such taxing jurisdiction6
permanently or temporarily or whether such seller or subsidiary is qualified to do7
business in such taxing jurisdiction, or any person who makes deliveries of tangible8
personal property into the taxing jurisdiction other than by a common or contract9
carrier. "Engaging in business in the taxing jurisdiction" also means and includes10
the solicitation of business through an independent contractor or any other11
representative pursuant to an agreement with a Louisiana resident or business under12
which the resident or business, for a commission, referral fee, or other consideration13
of any kind, directly or indirectly refers potential customers, whether by link on an14
Internet website or otherwise, to the seller.15
* * *16
(m)(i) Any person selling tangible property or services, the use of which is17
taxed pursuant to this Chapter, who:18
(aa) Sells the same or substantially similar line of products as a Louisiana19
retailer under the same or substantially similar business name, using the same20
trademarks, service marks, or trade names that are the same or substantially similar21
to those used by the Louisiana retailer.22
(bb) Uses the facilities or employees of a Louisiana retailer to advertise or23
promote sales by the person to Louisiana purchasers, or to facilitate returns, issuance24
of refunds or credits, or adjustments on property sold by the person.25
(cc) Solicits business and develops and maintains a market in Louisiana26
through an agent, salesman, independent contractor, solicitor, or other representative27
pursuant to an agreement with a Louisiana resident or business, hereinafter referred28
to collectively as "affiliated agent" under which the affiliated agent, for a29 HLS 12RS-2293 ORIGINAL
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commission, referral fee, or other consideration of any kind engages in activities in1
this state that inure to the benefit of the person in the person's development or2
maintenance of a market for its goods or services in the state, to the extent that those3
activities of the affiliated agent are sufficient to satisfy the nexus requirement of the4
United States Constitution. For purposes of this Subparagraph, such activities of the5
affiliated agent shall include referral of potential customers to the person, either6
directly or indirectly, whether by link on an Internet website or otherwise.7
(ii)(aa) In addition to those persons established as dealers according to Item8
(i) of this Subparagraph, the provisions of this Subparagraph shall be presumed by9
the taxing authority to apply to any person who holds a substantial ownership10
interest, directly or through a subsidiary, in a retailer maintaining sales locations in11
Louisiana, or to any person who is owned in whole or in substantial part by a retailer12
maintaining sales locations in Louisiana, or by a parent or subsidiary thereof.13
(bb) For the purposes of this Subparagraph, "substantial ownership interest"14
means affiliated persons with respect to each other where one of such persons has an15
ownership interest of more than five percent, whether direct or indirect, in the other,16
or where an ownership interest of more than five percent, whether direct or indirect,17
is held in each of such persons by another person or by a group of other persons18
which are affiliated persons with respect to each other.19
(iii) A dealer, as defined in and for purposes of this Subparagraph, shall file20
all applicable sales and use tax returns and remittances through the electronic filing21
options available for such purposes. Further, such dealer shall not be authorized to22
collect the tax authorized by R.S. 47:302(K)(5).23
(iv) The provisions of this Subparagraph holding that certain business24
activities conducted by certain persons establishes the person as a dealer for purposes25
of sales and use tax levied by the state and its political subdivisions shall not be used26
in the determination of whether such persons are liable for the payment of income27
and franchise taxes levied by the state.28
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§302. Imposition of tax1
* * *2
K. An additional tax shall be levied as follows:3
* * *4
(5) The tax levied under this Subsection shall be levied and collected only5
from vendors who qualify as a "dealer" in this state solely by virtue of engaging in6
regular or systematic solicitation of a consumer market in this state by the7
distribution of catalogs, periodicals, advertising fliers, or other advertising, or by8
means of print, radio, or television media, including but not limited to television9
shopping channels, by mail, telegraphy, telephone, computer database, cable, optic,10
microwave, or other communication system. The provisions of this Paragraph shall11
not apply to any dealer defined in R.S. 47:301(4)(m).12
* * *13
Section 2. The provisions of this Act shall apply prospectively.14
Section 3. This Act shall become effective upon signature by the governor or, if not15
signed by the governor, upon expiration of the time for bills to become law without signature16
by the governor, as provided by Article III, Section 18 of the Constitution of Louisiana. If17
vetoed by the governor and subsequently approved by the legislature, this Act shall become18
effective on the day following such approval.19
DIGEST
The digest printed below was prepared by House Legislative Services. It constitutes no part
of the legislative instrument. The keyword, one-liner, abstract, and digest do not constitute
part of the law or proof or indicia of legislative intent. [R.S. 1:13(B) and 24:177(E)]
Patrick Williams HB No. 1114
Abstract: Expands the definition of "dealer" to include persons who have certain
substantial relationships and similarities with La. retailers or who engage in business
in La. through the use of certain affiliated agents.
Present law provides various definitions of "dealer" with respect to sales and use tax law and
defines "engaging in business in a taxing jurisdiction".
Proposed law retains present law but expands the definition of "engaging in business in the
taxing jurisdiction" to include the solicitation of business through an independent contractor
or any other representative pursuant to an agreement with a La. resident or business under
which the resident or business, for a commission, referral fee, or other consideration of any HLS 12RS-2293 ORIGINAL
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kind, directly or indirectly refers potential customers, whether by link on an Internet website
or otherwise, to the seller.
Proposed law retains present law but expands the definition of "dealer" to include a person
who (1) sells the same or substantially similar line of products as a La. retailer under the
same or substantially similar business name; (2) the facilities or employees of the La. retailer
are used to advertise or promote sales by the person to La. purchasers and to support the
maintenance of a market in La.; (3) solicits business and develops a market in La. through
an agent or other representative through an agreement for a commission, referral fee, or
other consideration who engages in activities in La. that inure to the benefit of the person in
the person's development or maintenance of a market for its goods or services in La., to the
extent that those activities of the agent are sufficient to satisfy the nexus requirement of the
U.S. Constitution; or (4) holds a substantial ownership interest, directly or through a
subsidiary, in a retailer maintaining sales locations in La. or who is owned in whole or in
substantial part by a retailer maintaining sales locations in La.
Proposed law requires persons who meet the definition of a dealer under proposed law to
electronically file tax returns and remittances to the state and local taxing authorities.
Present law levies an additional 4% sales and use tax to be collected only by dealers who
qualify as a dealer in this state solely by virtue of engaging in regular or systematic
solicitation of a consumer market in La. by the distribution of catalogs, periodicals,
advertising fliers, or other advertising, or by means of print, radio, or telephone media,
including but not limited to television shopping channels, by mail, telegraphy, telephone,
computer database, cable, optic, microwave, or other communication system.
Proposed law specifies that present law, regarding the levy and collection of the additional
4% sales tax, shall not apply to persons who are defined as dealers pursuant to proposed law.
Provisions of proposed law apply prospectively.
Effective upon signature of governor or lapse of time for gubernatorial action.
(Amends R.S. 47:301(4)(h) and 302(K)(5); Adds R.S. 47:301(m))