Requires the filing of an annual use tax return for the payment of use tax on taxable tangible personal property and services purchased from a remote seller (EG INCREASE GF RV See Note)
Impact
The bill mandates that all taxpayers who have made such purchases and haven't paid the applicable sales tax at the time of sale will now be held responsible for filing a return and remitting the use tax by May 15 each year. This will play a significant role in the state's ability to capture revenue that might otherwise be lost due to online shopping and remote sales, creating a fairer marketplace. However, a notable provision allows taxpayers to utilize a 'safe harbor' method, which means they can opt to pay an estimated amount of tax based on their federal adjusted gross income, rather than calculating their actual tax liability, thereby simplifying the process for many individuals.
Summary
House Bill 847 aims to enhance the state's collection of use taxes by requiring Louisiana taxpayers who purchase tangible personal property or taxable services from remote sellers to file an annual use tax return. The motivation behind this proposed legislation is to level the playing field between local retailers and out-of-state sellers who do not currently collect sales tax. By requiring taxpayers to report use tax liabilities, the bill seeks to improve tax compliance and revenue collection for the state, effective from January 1, 2015.
Sentiment
Overall, the sentiment surrounding HB 847 has been mixed. Supporters argue that the measure is a step towards ensuring that state revenue keeps pace with the changing landscape of commerce, particularly with the rise of e-commerce. They believe this will protect local businesses and help sustain public services funded by tax revenues. However, some criticism has emerged, particularly around the requirements placed on consumers to self-report taxes, as this increases the burden on taxpayers who may not be fully aware of their responsibilities under the law.
Contention
Opponents of the bill argue that additional tax reporting requirements may be burdensome and that the system could be complicated for average consumers who buy sporadically from remote sellers. Additionally, there are concerns regarding how penalties for non-compliance will be enforced and whether the legislation could disproportionately affect lower-income households. The effectiveness of the bill is tied to a federal law, which may eventually require remote sellers to collect sales tax, thereby reducing the necessity of individual tax filings under HB 847.
Provides with respect to the levy of state sales and use taxes on certain sales of tangible personal property and services (OR INCREASE GF RV See Note)
To provide for the payment of a vendor's compensation for the state sales and use tax collection and to dedicate certain state sales tax revenues (EN +$4,300,000 GF RV See Note)