Here’s a special end-of-year tax move for Louisiana online shoppers. Make sure your purchase is delivered by Dec. 31.
That’s the last day Pelican State consumers can get anything from Amazon with no sales tax included on the invoice.
On Jan. 1, 2017, the online retail giant will start adding the appropriate sales tax amounts, both state and city, to items shipped to Louisiana addresses. The new tax addition applies to all online sellers, not just Amazon.
Use tax ignored: Technically, Louisiana buyers have always owed the state’s sales tax, which currently is 5 percent, and any applicable local sales tax on their purchases even when Amazon didn’t calculate the amount.
This levy in Louisiana and the 45 other states and Washington, D.C., that have sales taxes is known as the use tax.
As the name indicates, it is a tax for using an item in your home jurisdiction even if you bought it elsewhere.
But very — very, very, very, very — few consumers pay use taxes, even though many states include a line seeking their collection on state income tax forms. That’s why in the tax world, it’s known not so jokingly as the useless tax.
Sellers’ tax choice: To get around the widespread use tax evasion, Louisiana lawmakers decided to give Amazon and other online sellers a choice.
They can either document the taxable purchases delivered in the state or just go ahead and collect the applicable sales tax.
Amazon decided it was easier to calculate the tax amounts — there’s lots of software and outside services that do this — on shipments rather than filling out the paperwork to remind customers of the use tax they owe.
Tattling on tax evaders: The shopper data is similar to the so-called “tattletale tax” law that Colorado implemented. The U.S. Supreme Court on Dec. 12 declined to hear a challenge to the Rocky Mountain state’s law.
Opponents of the reporting law said then that the High Court’s decision, which they decried as an invasion to consumers’ private shopping habits, predicted it would prompt more such tax tactics nationwide.
“Unless Congress steps in and addresses this matter, it’s an issue that’s only going to intensify, particularly as other states decide to follow Colorado’s lead,” said Hamilton Davison, president and executive director of American Catalog Mailers Association. “[L]aws like these put an unfair burden on businesses and put personal privacy at risk while bringing government into the home and family.”
We’ll no doubt see if Davison’s prediction is correct. State lawmakers and tax officials tend to follow their neighbors examples when they are successful in bringing in more revenue.
Sales taxes collected in 31 locales: When Louisiana’s online sales tax collection law takes effect in just a few days, it will bring to 31 the number of jurisdictions that get sales taxes from out-of-state sellers.
Here’s the full list of states, including the upcoming Louisiana, where Amazon and other remote sellers collect sales tax from customers:
|District of Columbia||Maryland||North Dakota||West Virginia|
Since 5 states don’t collect a state-wide sales tax, when the New Year rolls around there will be just 15 states where Amazon and other online shoppers won’t face sales taxes added to their invoices.
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