HLS 15RS-923 ENGROSSED
2015 Regular Session
HOUSE BILL NO. 355
BY REPRESENTATIVE PUGH
Prefiled pursuant to Article III, Section 2(A)(4)(b)(i) of the Constitution of Louisiana.
TAX/SALES-USE, STATE: Provide for the collection of sales and use taxes due on sales
made in Louisiana by a remote dealer
1 AN ACT
2To amend and reenact R.S. 47:302(K)(7) and (U) and 305(E) and to enact R.S. 47:302(V),
3 relative to sales and use tax; to provide with respect to the collection and remittance
4 of sales and use tax; to provide for the definition of dealer; to provide a method for
5 reporting and remitting taxes by certain dealers; to provide for effectiveness; and to
6 provide for related matters.
7Be it enacted by the Legislature of Louisiana:
8 Section 1. R.S. 47:302(K)(7) and (U) and 305(E) are hereby amended and reenacted
9and R.S. 47:302(V) is hereby enacted, to read as follows:
10 §302. Imposition of tax
11 * * *
12 K. An additional tax shall be levied as follows:
13 * * *
14 (7)(a) Pursuant to an appropriation by the legislature, the avails of the tax
15 shall be distributed as follows:
16 (i) The secretary shall annually provide for an interagency transfer in the
17 amount of one hundred and thirty-two thousand dollars to the Department of State
18 Civil Service, Board of Tax Appeals, to be expended exclusively for the purposes of
19 its Local Tax Division, and thereafter distribute the proceeds of the tax.
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1 (ii) All monies remaining after satisfaction of the requirements of Item (i)
2 of this Subparagraph shall be distributed quarterly to the central local sales and use
3 tax collector or, if none, the parish governing authority according to population. The
4 central local sales and use tax collector or the parish governing authority shall at no
5 charge distribute the tax proceeds received from the secretary to each political
6 subdivision within the parish which levies a sales and use tax or receives a portion
7 of the proceeds of a parishwide sales and use tax levy, in accordance with each such
8 political subdivision's pro rata share of local sales and use tax receipts collected on
9 all other transactions subject to local sales and use taxes during the most recent state
10 fiscal year for which data is available within thirty days of receipt of the proceeds.
11 * * *
12 U. It is the duty of the secretary of the Department of Revenue to collect all
13 taxes imposed pursuant to this Chapter and Chapters 2-A and 2-B of this Subtitle
14 which may be due upon the sale by a remote seller dealer of tangible personal
15 property or services in Louisiana. The secretary is authorized and directed to employ
16 all means available to ensure the collection of the tax in an equitable, efficient, and
17 effective manner.
18 V. In addition to the definition of "dealer" as provided in R.S. 47:301(4), for
19 purposes of the consumer use tax, the term "dealer" includes every person who
20 manufactures or produces tangible personal property for sale at retail, for use, or
21 consumption, or distribution, or for storage to be used or consumed in a taxing
22 jurisdiction. "Dealer" is further defined to mean:
23 (1) Any person engaging in business in the taxing jurisdiction which shall
24 include:
25 (a) Any of the following methods of transacting business:
26 (i) Maintaining directly, indirectly, or through a subsidiary, an office,
27 distribution house, sales house, warehouse, or other place or location of business.
28 (ii) Having an agent, salesman, independent contractor, or solicitor operating
29 within the taxing jurisdiction under the authority of or through an agreement with the
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1 person or its subsidiary irrespective of whether the place of business, agent,
2 salesman, or solicitor is located in the taxing jurisdiction permanently or temporarily
3 or whether the person or subsidiary is qualified to do business in the taxing
4 jurisdiction.
5 (iii) Making deliveries of tangible personal property into the taxing
6 jurisdiction other than by a common or contract carrier.
7 (b) The solicitation of business through an independent contractor or any
8 other representative pursuant to an agreement with a Louisiana resident or business
9 under which the resident or business, for a commission, referral fee, or other
10 consideration of any kind, directly or indirectly refers potential customers, whether
11 by link on an internet website, an in-person oral presentation, telemarketing, or
12 otherwise to the seller. If the cumulative gross receipts from sales of tangible
13 personal property to customers in this state who are referred to the person through
14 such an agreement exceeds fifty thousand dollars during the preceding twelve
15 months, the presumption regarding the status of that person as a dealer may be
16 rebutted if the person can demonstrate, to the satisfaction of the secretary, that he
17 cannot reasonably be expected to have gross receipts in excess of fifty thousand
18 dollars for the succeeding twelve months.
19 (2) Any person selling tangible personal property or services, the use of
20 which is taxed pursuant to this Chapter, who:
21 (a) Sells the same or substantially similar line of products as a Louisiana
22 retailer under the same or substantially similar business name, using the same
23 trademarks, service marks, or trade names that are the same or substantially similar
24 to those used by the Louisiana retailer.
25 (b) Uses the facilities or employees of a Louisiana retailer to advertise or
26 promote sales by the person to Louisiana purchasers, or to facilitate returns, issuance
27 of refunds or credits, or adjustments on property sold by the person.
28 (c) Solicits business and develops and maintains a market in Louisiana
29 through an agent, salesman, independent contractor, solicitor, or other representative
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1 pursuant to an agreement with a Louisiana resident or business, hereinafter referred
2 to collectively as "affiliated agent" under which the affiliated agent, for a
3 commission, referral fee, or other consideration of any kind engages in activities in
4 this state that inure to the benefit of the person in the person's development or
5 maintenance of a market for its goods or services in the state, to the extent that those
6 activities of the affiliated agent are sufficient to satisfy the nexus requirement of the
7 United States Constitution. For purposes of this Subparagraph, such activities of the
8 affiliated agent shall include referral of potential customers to the person, either
9 directly or indirectly, whether by link on an internet website or otherwise.
10 (3) In addition to those persons established as dealers according to Paragraph
11 (2) of this Subsection, the provisions of this Subsection shall be presumed by taxing
12 authority to apply to any person who holds a substantial ownership interest, directly
13 or through a subsidiary, in a retailer maintaining sales locations in Louisiana; or to
14 any person who is owned in whole or in substantial part by a retailer maintaining
15 sales locations in Louisiana, or by a parent or subsidiary thereof. For purposes of
16 this Paragraph, "substantial ownership interest" means affiliated persons with respect
17 to each other where one of such persons has an ownership interest of more than five
18 percent, whether direct or indirect, in the other, or where an ownership interest of
19 more than five percent, whether direct or indirect, is held in each of such persons by
20 another person or by a group of other persons which are affiliated persons with
21 respect to each other.
22 (4) A dealer, as defined in and for purposes of this Subsection, shall file all
23 applicable sales and use tax returns and remittances through the electronic filing
24 options available for such purposes. Further, such dealer shall specifically collect
25 the tax authorized by R.S. 47:302(K)(5).
26 (5) The provisions of this Subsection holding that certain business activities
27 conducted by certain persons establishes the person as a dealer for purposes of sales
28 and use tax levied by the state and its political subdivisions, shall not be used in the
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1 determination of whether such persons are liable for the payment of income and
2 franchise taxes levied by the state.
3 * * *
4 §305. Exclusions and exemptions from the tax
5 * * *
6 E. It is not the intention of any taxing authority to levy a tax upon articles of
7 tangible personal property imported into this state, or produced or manufactured in
8 this state, for export; nor is it the intention of any taxing authority to levy a tax on
9 bona fide interstate commerce; however, nothing herein shall prevent the collection
10 of the taxes due on sales of tangible personal property into this state which are
11 promoted through the use of catalogs and other means of sales promotion and for
12 which federal legislation or federal jurisprudence enables the enforcement of the
13 sales tax of a taxing authority upon the conduct of such business. It is, however, the
14 intention of the taxing authorities to levy a tax on the sale at retail, the use, the
15 consumption, the distribution, and the storage to be used or consumed in this state,
16 of tangible personal property after it has come to rest in this state and has become a
17 part of the mass of property in this state. At such time as federal legislation or
18 federal jurisprudence as to sales in interstate commerce promoted through the use of
19 catalogs and other means of sales promotions enables the enforcement of this
20 Chapter or any other law or local ordinance imposing a sales tax against vendors that
21 have no other nexus with the taxing jurisdiction, the following provisions shall apply
22 to such sales on which sales and use tax would not otherwise be collected.
23 * * *
24 Section 2. The provisions of this Act shall apply to tax periods beginning on and
25after July 1, 2015. If the United States Congress enacts legislation authorizing states to
26require a remote seller to collect sales taxes on taxable transactions, such legislation shall
27preempt the provisions of R.S. 47:302(V) and the Department of Revenue shall have the
28authority to promulgate regulations under the Louisiana Administrative Procedure Act to
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1carry out the provisions of the federal legislation. The Department of Revenue shall begin
2to promulgate such rules within ninety days of the effective date of the federal legislation.
3 Section 3. This Act shall become effective upon signature by the governor or, if not
4signed by the governor, upon expiration of the time for bills to become law without signature
5by the governor, as provided by Article III, Section 18 of the Constitution of Louisiana. If
6vetoed by the governor and subsequently approved by the legislature, this Act shall become
7effective on the day following such approval.
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)]
HB 355 Engrossed 2015 Regular Session Pugh
Abstract: For purposes of collection of sales and use taxes by a remote seller, expands the
definition of "dealer" to include persons who have certain substantial relationships
and similarities with La. retailers, transact business in a certain manner, or who
engage in business in La. through the use of certain affiliated agents; also changes
the distribution of tax collections to local taxing authorities from annually to
quarterly.
Present law levies an additional 4% state sales and use tax to be collected only by dealers
who qualify as a dealer in La. solely by virtue of engaging in regular or systematic
solicitation of a consumer market in La. by the distribution of catalogs, and other print
media, radio, television, and other electronic and digital media.
Proposed law retains present law and adds methods of engaging in regular business in La.
including oral presentations and telemarketing.
Present law requires the secretary of the Dept. of Revenue to annually distribute the avails
of the tax to parish governing authorities based on population, which monies are then
distributed to the local taxing authorities in the respective parish.
Proposed law retains present law but changes the frequency of distributions by the secretary
to the parishes from annually to quarterly.
Proposed law specifies that present law regarding the levy and collection of the additional
4% sales and use tax shall apply to persons who are defined as dealers pursuant to proposed
law.
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:
(1)The solicitation of business through an independent contractor or any other
representative pursuant to an agreement with a La. resident under which the resident,
for a commission, referral fee, or other consideration of any kind, directly or
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HB NO. 355
indirectly refers potential customers, whether by website link, personal presentation,
telemarketing, or otherwise, to the seller.
(2)For purposes of qualification as a "dealer" through an agreement with a La. resident
to maintain a business in La., the presumption that a person is a dealer, based upon
annual gross receipts from sales of property delivered in La. that exceed $50,000, is
rebuttable if the person can demonstrate that he cannot reasonably be expected to
have gross receipts in excess of $50,000 in the following 12 months.
Proposed law retains present law but expands the definition of "dealer" to include a person
who meets any of the following criteria:
(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)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.
Proposed law prohibits the determination that certain business activities establishes a person
as a dealer for purposes of sales and use tax from being used in a determination of whether
the person is liable for the payment of state income or franchise taxes.
Proposed law provides that if the U.S. Congress enacts legislation authorizing states to
require a remote seller to collect sales taxes on taxable transactions, the federal law shall
preempt the provisions of proposed law. Further, directs the secretary of the Dept. of
Revenue to promulgate rules to carry out the provisions of the federal law within 90 days of
its effectiveness.
Applicable to tax periods beginning on and after July 1, 2015.
Effective upon signature of governor or lapse of time for gubernatorial action.
(Amends R.S. 47:302(K)(7) and (U), and 305(E); Adds R.S. 47:302(V))
Summary of Amendments Adopted by House
The Committee Amendments Proposed by House Committee on Ways and Means to the
original bill:
1. Change the frequency in which the state transmits the portion of the tax
collections dedicated to local taxing authorities from annually to quarterly.
2. Add to the definition of "dealer" with respect to methods of transacting and
solicitation of business.
3. Change the threshold level of sales activity for purposes of the definition of
"dealer" from a cumulative total of $250,000 or 100 sales of tangible personal
property in one year to $50,000 in sales of tangible personal property in one year.
4. Specify that the provisions of proposed law shall apply to tax periods beginning
on and after July 1, 2015.
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HB NO. 355
5. Add provisions that if the U.S. Congress enacts legislation authorizing states to
require a remote seller to collect sales taxes on taxable transactions, the federal
law shall preempt the provisions of proposed law. Further, directs the secretary
of the Dept. of Revenue to promulgate rules to carry out the provisions of the
federal law within 90 days of its effectiveness.
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