United States

Louisiana: Use Tax Notification Bill Heads to Governor

Jun 13, 2016
From KPMG TaxWatch

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House Bill 1121, which has been sent to Governor John Bel Edwards for signature, adopts use tax reporting requirements for non-collecting remote sellers making sales to Louisiana purchasers. Only retailers that are not required by law to collect and that (with their affiliates) make over $50,000 worth of taxable sales of property or services annually to Louisiana customers are subject to the reporting requirements. The Louisiana requirements track closely those adopted in Colorado in 2010 that have yet to be enforced due to ongoing litigation. House Bill 1121 mandates that, at the time of sale, a non-collecting remote retailer must notify a Louisiana purchaser that the purchase is subject to Louisiana use tax unless it is specifically exempt and explain that the purchase is not exempt simply because it is made via the Internet, catalogue or other remote means. The notice must include a statement that use tax liability must be paid annually on the individual income tax return or through other means.

The second notification requirement is that by January 31 of each year, a remote retailer must send each Louisiana purchaser a notice containing the total amount paid by the purchaser for goods and services from the seller in the preceding calendar year, as well as any other information required under rules to be promulgated by the Secretary of Revenue. If the information is available, the annual notice shall include a listing of the dates and amounts of purchases, and if known by the retailer, whether the property or service is exempt from sales and use taxes. The annual notice must clearly disclose the name of the retailer and must remind purchasers that Louisiana use tax may be due on the purchases and that the liability is to be paid on the individual income tax return or through other means. The annual notification may be sent (at the purchaser’s choice) by first class mail, certified mail, or electronically, but cannot be included with any other shipment or mailing from the retailer. Further, if mailed, the exterior of the envelope in which the notice is sent must state "IMPORTANT TAX DOCUMENT ENCLOSED.”

Finally, by March 1 of each year, a remote retailer must file with the Secretary of Revenue an annual statement for each purchaser that includes the total amount paid by the purchaser to that retailer in the immediately preceding calendar year. Under no circumstances should the statement identify the specific property or services purchased, but must include the total amount paid. The statement will be submitted on forms to be developed and provided by the Secretary. A remote retailer that had sales in Louisiana in excess of $100,000 in the immediately preceding calendar year may be required to file the form electronically. House Bill 1121 does not include penalties for non-compliance with the reporting requirements, but does provides means for the Secretary to enforce the requirements, including issuing subpoenas and seeking letters rogatory. Please contact Randy Serpas at 504-569-8810 with questions on House Bill 1121.

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The following information is not intended to be "written advice concerning one or more federal tax matters" subject to the requirements of section 10.37(a)(2) of Treasury Department Circular 230.

The information contained herein is of a general nature and based on authorities that are subject to change. Applicability of the information to specific situations should be determined through consultation with your tax adviser.