Giant online retailer Amazon will be required to collect sales taxes from Louisiana customers (as brick and mortar businesses have always been required to do) starting on Jan. 1, 2017. Read more.
In March 2016, the Louisiana Senate passed E-fairness HB 30 unanimously (vote of 38 yeas and 0 nays) that requires remote dealers to collect sales tax on LA sales. See our advocacy here.
StayLocal is a part of the Louisiana Coalition for E-Fairness, a partnership between StayLocal, Greater New Orleans, Inc., and the Louisiana Retailers Association working with Louisiana businesses to resolve sales tax collection discrepancies between brick & mortar retailers and out of state online sellers that hinder local businesses’ ability to compete and grow their business.
The issue of e-fairness is of paramount importance to many businesses in the StayLocal network. Last year, the United States Senate passed the Marketplace Fairness Act, which would fix the issue once and for all. StayLocal and our partners worked on the state level to push for legislation that would allow our local businesses to compete effectively and grow their business, and in turn, contribute to statewide economic growth and job creation.
Read more about StayLocal’s recent efforts at staylocal.org/e-fairness
StayLocal has been actively advocating for efairness since the problem was brought to our attention by local independent retailers in 2008. Here’s an editorial UC director Dana Eness wrote in 2009:
E-Fairness is Not a New Tax
By Dana Eness, Urban Conservancy Executive Director
While Jefferson and Orleans parishes both reported dramatic shortfalls in projected sales tax revenue for 2009, little has been said about the role that the popularity of online retail plays.
Consumers are drawn to the convenience and savings that tax-free online shopping provides, but don’t realize that their community pays for these savings in three significant ways.
First, low-income families carry an unfair tax burden since credit card and internet access, and therefore tax-free online retail, are most available to higher income brackets. Thus, the most regressive form of taxation becomes even more regressive.
Second, the community loses needed tax revenue to fund public services including police protection, healthcare, and schools. Internet retailers with no physical presence or “nexus” in a state are not required to collect sales taxes on purchases. In theory, consumers are required to keep track of their online purchases and then pay the appropriate amount owed in sales tax as “use tax” on their state tax return. In practice, this “fair use tax law” is nearly unenforceable. A 2009 University of Tennessee study estimated that uncollected sales taxes on e-commerce cost Louisiana $344 million in 2010 and predicts those losses will rise to $440 million by 2012.
Finally, exempting online retailers from collecting sales taxes puts bricks-and-mortar businesses at a competitive disadvantage. In Orleans and Jefferson parishes, where sales taxes approach ten percent, companies like Amazon, the nation’s 20th largest retailer, are granted, in effect, a nearly 10 percent price advantage over local businesses.
Local businesses adversely affected by this are working with The Urban Conservancy to bring attention to this serious matter.