6/26/18: Sales Tax on Online Purchases
On June 21, 2018, the Supreme Court in South Dakota vs. Wayfair reversed the 1992 ruling from Quill v. North Dakota regarding the sales tax on online purchases. Quill required that an out-of-state retailer have some physical presence in a state before a state could require the retailer to collect sales and use tax.
The states have been fighting the Quill ruling for years, and multiple states have enacted laws to attempt an increase in the collection of sales tax on online purchases from retailers without a presence in the state. Currently, Louisiana requires retailers with over $50,000 of sales in the state to either register and collect sales tax or report the sales to the state and the taxpayer. After receiving the letter from the retailer, it is the taxpayer's responsibility to report those online sales on their Louisiana tax returns.
The recent ruling in South Dakota v. Wayfair allows the states to enact laws that will require the out-of-state retailers to collect sales tax on online purchases no matter the level of sales or physical presence. It is not clear what kind of laws the states will enact, or if Congress will enact more universal laws that will simplify the process so small online retailers are not impacted in the process.
If you have any questions and need assistance, please contact Faulk & Winkler, LLC at (225) 927-6811.