Repeals contingent effectiveness from Act No. 5 of the 2 E.S. relative to the definition of dealer for purposes of collecting sales and use taxes on transactions involving remote dealers (Item #1)
Impact
The repeal is significant because it directly affects how remote dealers are taxed in Louisiana, particularly in light of the Supreme Court's decision in South Dakota v. Wayfair. Under current law, remote sellers must collect sales tax if their gross revenue from sales in Louisiana exceeds $100,000 or if they conduct 200 or more transactions in the state. By revoking the conditional applicability, the bill promotes the immediate enforcement of these regulations and aims to collect sales tax revenue more effectively from remote vendors, potentially benefiting the state's economy.
Summary
House Bill 13, introduced by Representative Nancy Landry, aims to repeal Section 2 of Act No. 5 from the 2018 Second Extraordinary Session. This section defined a 'dealer' for sales and use tax purposes, specifically regarding transactions involving remote dealers. The proposed legislation removes the conditional applicability that was contingent upon a ruling from the United States Supreme Court regarding the constitutionality of certain state tax laws. By eliminating this provision, the bill intends to clarify and simplify the tax obligations for remote sales in Louisiana.
Sentiment
The sentiment surrounding HB 13 appears generally positive among supporters, especially those who advocate for a streamlined tax policy that benefits local businesses. Proponents argue that removing contingencies will expedite tax collection from remote sellers, thereby leveling the playing field for local retailers. However, there may be some concerns among those who fear that such rapid changes could impose an unexpected burden on smaller remote businesses, who may not be prepared to comply with new tax obligations immediately.
Contention
Notable points of contention include the potential economic impact on smaller remote businesses that may struggle with compliance due to the increased tax demands. Additionally, there are concerns about the administrative burden placed on both the state and these businesses to quickly adapt to the new tax framework. The debate reflects broader discussions about tax fairness and the balance between supporting local businesses while ensuring that remote sellers contribute their fair share to the state’s revenue.
Changes the effective date for the definition of "dealer" for purposes of the sales and use tax imposed on transactions involving a remote seller. (gov sig) (EG SEE FISC NOTE See Note)
Provides criteria for the definition of "dealer" for purposes of the sales tax imposed on transactions involving a remote seller (Item #26) (REF +$507,000,000 GF RV See Note)
Provides criteria for the definition of "dealer" for purposes of the sales tax imposed on transactions involving a remote seller (Item #26) (EN SEE FISC NOTE GF RV See Note)
Urges and requests the secretary of the Dept. of Revenue to report certain aggregated data concerning sales and use tax collections on transactions involving remote dealers to the legislature
Provides for the definition of a dealer for purposes of collection of sales and use taxes due on sales made in Louisiana by a remote dealer (EG SEE FISC NOTE GF RV See Note)
Provides for the amount of vendors (dealers) compensation payable for the collection and remittance of state sales and use taxes (Item #21) (OR +$6,700,000 GF RV See Note)