No easy solutions for internet taxes
Louisiana hopes to begin collecting internet sales taxes on Jan. 1, but it isn’t close to the ideal situation. When the U.S. Supreme Court cleared the way for internet sales tax collections it liked the fact South Dakota had a centralized collection system for state and local taxes, but Louisiana doesn’t.
Currently there are 24 states that have adopted the simplification measures of the Streamlined Sales and Use Tax Agreement. Its goal is to improve sales and use tax administration systems for all sellers and all types of commerce. Member states represent over 31 percent of the U.S. population.
The nonpartisan and conservative Tax Foundation has been critical of Louisiana’s current collection system for some time, and brought that issue up again in its 2019 State Business Tax Climate Index. Louisiana ranked 44th in the index primarily because of its high sales taxes and its decentralized collection system that complicates business transactions.
Change is difficult because local officials are wary of turning their responsibilities and collections over to the state. So rather than working harder to set up a centralized collection system, Louisiana created a second system for internet sales tax collections.
The new system is being administered through the Louisiana Sales and Use Tax Commission for Remote (internet) Sellers. The commission believes a software program will aid businesses by simplifying collections.
Meanwhile, the Sales Tax Streamlining and Modernization Commission continues its effort to improve regular state collections. The Legislature moved in that direction at least for the next seven years when it eliminated a number of sales tax exemptions at the same time it increased the state sales tax by 0.45 percent.
The separate system being developed envisions the state collecting all internet taxes and forwarding local taxes to local jurisdictions. How local officials will react to the final plan remains to be seen.
Any additional tax reform appears to be out of the question since 2019 is a statewide and legislative election year. However, voters need to let legislative candidates know they expect some tax reform in the future than can lead to lower state sales taxes.
This editorial was written by a member of the American Press Editorial Board. Its content reflects the collaborative opinion of the Board, whose members include executive editor Crystal Stevenson, John Guidroz, retired editor Jim Beam and retired staff writer Mike Jones.