Have You Registered for Our Seminar? Send in Your Questions!

Have you already registered for our upcoming Cooking with SALT program on Wednesday, October 9? If so, be sure to send in your questions for our JW presenters and guest speakers on any of your tax-related issues!

The seminar will feature special guest speakers:
• Luke Morris, Assistant Secretary of the Office of Legal Affairs, Louisiana Department of Revenue
• Kelley Askew Gillikin, Acting Director, Tax Policy and Governmental Affairs Division, Alabama Department of Revenue
• Karey Barton, Associate Deputy Comptroller for Tax, Texas Comptroller of Public Accounts
• Jan Craig, Associate Commissioner, Income/Franchise Tax, Mississippi Department of Revenue

Still need to register? Click here to view our brochure.

Have a question or tax issue to address? Click here to send it to our team.

Jones Walker Presents Annual State & Local Tax Seminar in Houston, TX

The Jones Walker LLP State & Local Tax team is back with a day-long program on October 9, 2019, titled Jones Walker Cooking With SALT Goes to Margaritaville! This State & Local Tax workshop will be going through all the greatest hits and new cuts. First, you will be guided through the fin-infested waters of Louisiana state and local tax procedure. Then, get acclimated to the climate after recent legislative updates. Next, we will find that lost shaker and help you add the perfect amount of SALT to your contract documents.

Join us at lunch for “Cheeseburgers in Paradise” featuring a moderated panel of key state tax administrators from Louisiana, Mississippi, Texas, and Alabama. The administrators will provide their perspective on recent tax developments, so you don’t feel like a “Cowboy in the Jungle.” Then, in the afternoon, everyone will decide where “they’re a-gonna go” for breakout sessions addressing (1) sales/use tax and (2) income/franchise tax. After breakouts, we’ll come back together to discuss what “you got cookin’,” and we will conclude with a Q&A.

The seminar will feature special guest speakers:
• Luke Morris, Assistant Secretary of the Office of Legal Affairs, Louisiana Department of Revenue
• Kelley Askew Gillikin, Acting Director, Tax Policy and Governmental Affairs Division, Alabama Department of Revenue
• Karey Barton, Associate Deputy Comptroller for Tax, Texas Comptroller of Public Accounts
• Jan Craig, Associate Commissioner, Income/Franchise Tax, Mississippi Department of Revenue

View the full brochure.

When: Wednesday, October 9, 2019 | 8:00 a.m. – 5:30 p.m.

Where: Hilton Americas-Houston | 1600 Lamar St | Houston, TX 77010

Fee: $150 per registrant
Company group rate: $150 for first registrant, $100 for each subsequent registrant

Questions?/To Register: Contact Courtney Farley at cfarley@joneswalker.com.

This program is intended for intermediate to advanced practitioners in state and local tax administration and those doing business in Louisiana, Mississippi, Texas, and along the Gulf Coast. The full day’s program has been recommended for 8 hours of Texas CPE. This course has been approved for Minimum Continuing Legal Education credit by the State Bar of Texas Committee on MCLE in the amount of 8 credit hours, of which 0 credit hours will apply to legal ethics/professional responsibility credit.

SAVE THE DATE for Jones Walker’s 11th Annual State and Local Tax Seminar

WHEN: WEDNESDAY, OCTOBER 09, 2019

WHERE: HILTON AMERICAS-HOUSTON

Please Save the Date for Jones Walker’s 11th Annual State & Local Tax Seminar!

Be sure to check back for upcoming program details! This program is intended for industry tax professionals and will be recommended for Texas CPE. Full brochure coming soon!

Questions? Contact Courtney Farley at cfarley@joneswalker.com

Wal-Mart.com Oral Argument at Louisiana Supreme Court Now Set for September 4th

The date and time are now set for the much-anticipated oral argument of the Wal-Mart.com “marketplace” litigation matter in Louisiana’s highest court!

On September 4th, at 2:00 PM CT, the Louisiana Supreme Court will hear oral arguments of the taxpayer, Wal-Mart.com, and the local tax collector, the Jefferson Parish Sheriff’s Office (JPSO).

A link the Louisiana Supreme Court’s Official Docket for that date can be found here:  http://www.lasc.org/docket/dockets/Sept2019.pdf.

Live streaming video of the oral argument on the big day can be viewed here:  https://livestream.lasc.org/.

City of New Orleans Offering Amnesty Late Fee Forgiveness Program

In an effort to spur the payment of unpaid back taxes and fees, the City of New Orleans is currently offering an Amnesty Late Fee Forgiveness Program, which began June 3rd and runs through September 3rd, 2019. Certain tax deficiencies, as well as parking and certain camera tickets, code enforcement violations, and even library fines may be paid with reduced or waived fees, penalties, and interest.

The amnesty program offers business owners and operators with delinquent tax accounts an opportunity to settle those accounts without having to pay penalties and all of the accrued interest.

Qualifying taxes include:

  • Sales/use
  • hotel/motel
  • parking
  • alcoholic beverage gallonage
  • occupational license taxes
  • various permits

Delinquent property taxes are not eligible for the amnesty program.

Qualifying taxpayers include:

  • Those who failed to file a tax return and pay the tax due
  • Those who failed to register and/or file sales or any other type of tax, license or permit
  • Taxpayers who are currently under an installment agreement or have defaulted on an installment agreement
  • Taxpayers who underpaid tax or have any outstanding sales tax balance
  • Taxpayers who have failed to pay for or renew an Occupational License or permit
  • Taxpayers currently under audit or in litigation for sales tax matters
  • Taxpayers who misrepresented or omitted tax due
  • Taxpayers who have sales tax liens on personal or business property
  • Taxpayers who claimed incorrect credits or deductions on tax returns

The benefits of the program for taxpayers include a waiver of all penalties and 50% of accrued interest. Taxpayers participating in the program must pay their liability in full by November 15, 2019, with a 50% down payment required at the time of application, and the option of two equal remaining payments.

Taxpayers should note that this is not a voluntary disclosure program, and it will require identification of the taxpayer at the time of application. A taxpayer applying for amnesty might be required to register with the city if the taxpayer does not already have an existing account.

For a full explanation of qualifications and benefits, please click here.

Jay Adams Named IPT Instructor of the Year for Sales Tax

Our own Jay Adams was named by the Institute for Professionals in Taxation (IPT) as its Instructor of the Year for Sales Tax at the IPT Annual Conference! Jay earned this award in recognition of his significant contributions to the IPT’s Sales Tax School I, many years of instruction at IPT events, and the highly positive evaluations he received from his engaging and interactive presentation style.

Congrats, Jay!

June 2019 Louisiana Remote Sellers Commission Meeting Brings Good News and… No News

Monday’s meeting in Baton Rouge of the Louisiana Sales and Use Tax Commission for Remote Sellers (the “Commission”) included two pieces of good news for just about everyone involved in or affected by the state’s effort to centralize the collection and remittance of sales taxes for remote sales. Unfortunately, there still remains a lack of clarity as to exactly who will be subject to the remote seller provisions of Act No. 5 of the 2018 2nd Extraordinary Session (“Act 5”) and HB 547, (signed into law by Governor Edwards on June 17, 2019 and designated as Act No. 360)… but let’s get to that in a moment.

First, the Technology Sub-Committee reported that it is close to completing the local tax matrix. When finished, the matrix will include all of the sales tax rates for all of the state’s local sales tax jurisdictions, as well as relevant exemptions and exclusions.

Second, the Committee also reported that the draft central sales tax return is nearing completion. This return will be used by qualifying remote sellers to report and remit sales taxes collected on remote sales of items delivered into Louisiana.

Following the completion of these essential steps, Louisiana will be able to provide this information to software service providers, who will, in their turn, be able to develop software to be utilized by remote sellers to prepare and file the Commission’s central tax return.

In the meantime, the clock is ticking for the Commission and businesses alike: Act 5 and Act 360 take effect for tax periods beginning July 1, 2019, with the Commission acting as the single collector of state and local sales taxes for remote sellers and as the party responsible for distributing local sales taxes to parishes and sub-jurisdictions. Until the Commission has established its central collection system, remote sellers will be able to use the state direct marketer’s return, which provides for a flat 8.45% rate to cover state and local sales taxes.

All of this is the good news that came out of this week’s meeting of the Commission. The “no news” of the title relates to the issue we reported on last week: to whom will Act 5 and Act 360 actually apply? More than 900 businesses have voluntarily registered to collect and remit sales tax using the direct marketer’s return. Looking ahead, however, it is quite possible that at least some of these might not qualify as “remote sellers” given the narrow definition of “remote sellers” in Act 360. The Commission’s meeting also lacked any discussion whatsoever about marketplace sales. While we applaud the Commission’s progress toward the development of a central return for remote sales, it remains to be seen when and how the Commission will take up other core issues.

There is one more piece of important news that came out of this week’s meeting: the election of the coming year’s Commission officers. Jeanine Theriot, the Sales Tax Administrator of the Jefferson Parish Sheriff’s Office and a member of the Commission representing the Louisiana Sheriff’s Association, was elected chairman, replacing Kimberly Robinson, Secretary of the Louisiana Department of Revenue. Darlene Allen, of the LDR, was elected vice-chairman, replacing Tiffani Delapasse, a member of the ULSTB.

SAVE THE DATE for Jones Walker’s 11th Annual State and Local Tax Seminar

WHEN: WEDNESDAY, OCTOBER 09, 2019

WHERE: HILTON AMERICAS-HOUSTON

Please Save the Date for Jones Walker’s 11th Annual State & Local Tax Seminar!

Be sure to check back for upcoming program details! This program is intended for industry tax professionals and will be recommended for Texas CPE. Full brochure coming soon!

Questions? Contact Courtney Farley at cfarley@joneswalker.com

Louisiana’s New Remote Sellers Law: What Does H.B. 547 Have in Common with a Box of Donuts?

As members of the Jones Walker SALT Team sat around the table in our office kitchen staring into a box of donuts provided by our firm on National Donut Day (the day after the close of the 2019 Regular Session of the Louisiana Legislature), we pondered this question: what does that box of tasty treats have in common with H.B. 547, which is Louisiana’s latest legislative expression on the subject of sales tax collection and remittance obligations for remote sellers? Two similarities quickly came to mind as we licked the glaze off our fingers.

First, the box of donuts definitely was full of some tasty treats (a dozen to be exact), and, well, H.B. 547 has some tasty ingredients, but certainly not a dozen. Second, H.B. 547, like that box of donuts, is full of holes.

H.B. 547, which is awaiting action by Governor Edwards, is Louisiana’s second legislative effort to bring Louisiana’s exceedingly complex state and local sales tax system into the post-Wayfair world envisioned by the United States Supreme Court in South Dakota v. Wayfair, Inc., 138 S.Ct. 2080, 201 L.Ed.2d 403 (2018), a world that many states have already entered in full force. Louisiana’s first effort, Act No. 5 of the 2018 2nd Extraordinary Session (“Act 5”), made some strides by establishing minimum economic nexus thresholds for state-level sales tax collection purposes (Act 5 is silent as to any local-level economic nexus standards) and attempting to establish the Louisiana Sales and Use Tax Commission for Remote Sellers (the “Commission”) as the single entity in Louisiana for the collection of state and local sales taxes on remote sales.

Unfortunately, as enacted, the provisions of Act 5 never became effective due to a drafting hole. Act 5’s provisions were not to become effective until a final ruling by the United States Supreme Court in Wayfair finding South Dakota’s remote seller law to be constitutional. In Wayfair, the Supreme Court overruled the physical presence requirement, but it did not reach a ruling on the constitutionality of South Dakota’s remote seller law. Thus, the provisions of Act 5 never got rolling like the donut that rolled across the table.

H.B. 547 essentially began its legislative path as a bill to fix the effective date provision of Act 5 and to address some of the issues the Commission had discussed and developed over the past few months. As is the case with many bills, H.B. 547 changed as it worked its way through the legislature. For example, at one point, provisions were added to specifically address a form of “centralized reporting” for online marketplace sales. There also were discussions among various stakeholders regarding issues, such as how to fund the work of the Commission, how to make sure local tax collectors received the proper amounts of sales taxes on remote sales, and how to make sure the local tax collectors retained their constitutional power and authority to operate independently from the state sales tax system.

Most importantly, stakeholders discussed a strategy for broadly defining “remote sales” and “remote sellers” to allow more businesses to take advantage of some form of centralized collection and remittance for remote sales. Most stakeholders agreed that this strategy would bring Louisiana more in line with the Wayfair standards, would avoid protracted and costly litigation over the constitutionality of Louisiana’s dizzyingly complex state and local sales tax systems, and would bring in much-needed state and local sales tax revenues on an efficient basis that is user-friendly for the tax collectors and their “deputy tax collectors” (i.e., remoted sellers).

Now that H.B. 547 is baked (half-baked?), what tasty treats does it contain? First, H.B. 547 fixes the effective date snafu in Act 5 by providing that H.B. 547 and Act 5 are effective for tax periods beginning July 1, 2019. This essentially means that the legislature has finally breathed life into the Commission, which will soon be fully effective and able to carry out its mission. Second, the Commission now has authority to be the single collector of state and local sales taxes for “remote sellers,” as narrowly defined in H.B. 547. Third, until the Commission fully establishes the central collection system for “remote sellers,” H.B. 547 allows “remote sellers” to temporarily use the state direct marketers return (the “DMR”) as provided in La. R.S. 47:302(K), which provides for a flat 8.45% rate to cover both state and local sales taxes.

Now, to the holes.

Much like the boxes of donuts pictured, H.B. 547 is full of holes. For example, H.B. 547 fails to address online marketplace sales. Marketplace facilitators provide an online marketplace for the sale of items by third parties. Louisiana sales tax laws presently are unclear, at best, regarding sales tax collection and remittance responsibilities for online marketplace sales, making Louisiana’s already mind-numbingly complex state and local sales tax systems even more complex. A Louisiana court of appeals recently “addressed” marketplace facilitators in Normand v. Wal-Mart.com USA, LLC, 18-211 (La. App. 5 Cir. 12/27/18); 263 So. 3d 974. This case is on appeal to the Louisiana Supreme Court and likely will be decided later in 2019. A complete discussion of the Wal-Mart.com case is beyond the scope of this article. Suffice it to say that the Louisiana Legislature missed a timely opportunity to thoughtfully and deliberatively address online marketplace sales though the legislative process on a prospective basis via H.B. 547. Language found its way into the bill but was unceremoniously stripped out in the legislative process.

Perhaps the largest hole in H.B. 547 is another opportunity missed by the legislature. H.B. 547 provides more specific definitions of “remote sales” and “remote sellers.” But the new definitions are so narrow that very few “online businesses” will qualify for the new remote sellers’ central collection process administered by the Commission. The problem arises because of the reference in the definition of “remote seller” to the definition of “dealer” in La. R.S. 47:301(4)(a) through (l). Reading these provisions together, the scope of “remote seller” that can benefit from the central collection system is very small. Indeed, sellers that engage in the regular solicitation of a consumer market in Louisiana through any type of advertising or media can potentially be required to collect state and local sales taxes in Louisiana, but will not qualify as “remote sellers” that are allowed to use the Commission’s central filing system. Consequently, even sellers lacking any physical presence in Louisiana could be required to file sales tax returns with the state and every independent, local taxing jurisdiction in Louisiana. This begs the question: Has Louisiana made any meaningful headway in the post-Wayfair world?

The picture provides a great illustration of one of the shortcomings of H.B. 547. In order to bring Louisiana’s complex state and local sales tax systems more in line with the Wayfair criteria, avoid unnecessary litigation and related costs over the constitutionality of Louisiana’s system, ease the undue burden on the “deputy tax collectors” of the state and local tax administrators, and more quickly start the flow of much-needed revenues to the state and local tax recipient bodies at little or no additional costs, the Louisiana Legislature missed the opportunity to draft legislation that would have a scope as broad as the outer diameter of the donut in the picture above. Instead, the Louisiana Legislature focused on the diameter of the hole in the middle of the donut (or even smaller) when defining “remote sale” and “remote seller.”

Unless things change over the next year through the work of the Commission and further efforts by the Louisiana Legislature to broaden the scope of central collection of state and local sales taxes, and to address online marketplace transactions, all on a specific, non-speculative, and prospective basis, few “remote sellers” will be able to use the Commission’s central collection system. Confusion and undue burden will continue for both businesses and tax administrators. Needed revenues will not flow to the local tax recipient bodies. And litigation over the constitutionality of the discriminatory, complex state and local sales tax systems will undoubtedly follow, with the related time and costs. In other words, if Louisiana aims low and seeks to perpetuate the undeniable complexity and undue burden on interstate commerce caused by the current systems in Louisiana and force the systems into the hole of the donuts, the state, local governmental tax recipient bodies, and businesses will suffer. Louisiana will continue to be at the bottom.

With meaningful collaboration among all stakeholders, however, the Commission and the Louisiana Legislature can aim high, make Louisiana’s system as close as possible to a non-discriminatory, constitutional sales tax system envisioned by the U.S. Supreme Court in Wayfair, and move Louisiana out of the cellar when it comes to complex state and local sales tax systems. Aim for the outer diameter of the donut hole, not the inside. Everyone will enjoy the tasty treats of such a system.

ADDENDUM:  H.B. 547 was signed into law by Gov. Edwards on June 17, 2019.  It is now designated as Act No. 360 of the 2019 Regular Session.  It is fitting that the bill was assigned 360, just like a donut.

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