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 Reengrossed 2015 Regular Session Pugh
Abstract: For purposes of collection of the additional 4% state sales and use tax by a remote dealer,
expands the definition of "dealer" to include persons who have certain substantial
relationships and similarities with La. retailers, engage in business using certain agreements
with a La. resident, or who engage in business in La. through the use of certain affiliated
agents.
Present law levies an additional 4% state sales and use tax to be collected only by a person who
qualifies 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.
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 and expands the definition of dealer for purposes of the collection
of the additional 4% state sales and use tax to include the following activities and attributes:
(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 indirectly refers potential
customers, whether by website link, personal presentation, telemarketing, or otherwise, to
the seller. 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.
(2)Sale of the same or a substantially similar line of products as a La. retailer under the same
or substantially similar business name.
(3)Holding 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.
(4)Solicitation of business or maintenance of a market in La. through an agent, salesman,
independent contractor, or other representative (affiliated agent), through an agreement with the dealer.
Proposed law prohibits a La. retailer from collecting the additional 4% state sales and use tax in lieu
of the sales and use tax levied by a political subdivision and remitted to the political subdivision.
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.
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 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. However, the
Dept. of Revenue, for purposes of the promulgation of the rules, shall consult with the sales and use
tax commission established under present law for purposes of the distribution of the proceeds of the
additional 4% state sales and use tax to the parishes.
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)(5), (7)(a) and (U); 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. Add to the definition of "dealer" with respect to methods of transacting and solicitation
of business.
2. 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. 3. Specify that the provisions of proposed law shall apply to tax periods beginning on and
after July 1, 2015. 4. 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.
The House Floor Amendments to the engrossed bill:
1. Add a prohibition that a La. retailer shall not collect the additional 4% state sales and use
tax in lieu of collecting the sales and use tax imposed by a political subdivision.
2. Add a requirement that before promulgation of rules for purposes of implementing
federal law with regard to collection of state and local sales and use taxes on sales
involving remote dealers, the Dept. of Revenue shall consult with the sales and use tax
commission for purposes of the distribution of the proceeds of the additional 4% state
sales and use tax to the parishes.