Taxation

Louisiana prepares to tax online purchases in 2019

BATON ROUGE, La. (WVLA / WGMB) - After the Supreme Court lifted its ban last month, Louisiana will start charging sales taxes on purchases made online starting January 1, 2019.

It may seem like a good stretch of time for state officials to sort out uncertainties, but state and local bodies still have some ironing out to do.

"You're going to inevitably run into some conflicts and differences of opinion," said Robert Travis Scott, president of the Public Affairs Research Council of Louisiana.

Those differences could be enhanced by Louisiana's decentralized sales tax system. In most states, one entity collects sales taxes jointly for local and state bodies. Not so in the Pelican State, where the state collects 4.45% and local governments charge their own set amounts. That's why different zip codes often have different rates.

Scott said conflicts could brew between state government and those on the local level who want to collect the tax directly. Many localized bodies remain hesitant to surrender their sales tax collection power because that's where they depend most on revenue.

"They're not as dependent on the property tax as local governments are in most other states," he said. "They want to be protective of that tax revenue. They also feel like they can't depend on the state to give them that cash flow that they're owed."

The taxation on internet purchases will most largely affect smaller merchants on sites like eBay or Etsy. Larger online retailers, including Amazon and Wayfair, already collect taxes.


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