Louisiana Supreme Court “Deals” a Win to Wal-Mart.com and other Online Marketplaces

Today, in a case of first impression that has captured national attention, the Louisiana Supreme Court held in a 4-3 decision that Wal-Mart.com (an online marketplace facilitator) is not required to collect and remit Jefferson Parish sales tax on behalf of its third-party sellers.

See Normand v. Wal-Mart.com USA, LLC, 2019-263 (La. 12/29/19), __ So. 3d. __.

Wal-Mart.com operates an online marketplace, where third-parties can sell their products directly to customers on the Wal-Mart.com website. Wal-Mart.com argued that it did not have to collect and remit local sales tax to Jefferson Parish for third-party transactions on the marketplace, because it was not the “dealer” required to do so on these transactions under Louisiana law. Wal-Mart.com argued that the obligation to collect sales tax is limited to the party who actually transfers title or possession of the merchandise to an end consumer for a stated price (i.e., the actual third-party seller). Jefferson Parish, conversely, argued that Wal-Mart.com should have collected and remitted the tax, alleging that the applicable definition of “dealer” is broader than the seller.

As is the case in many other states, “dealer” is defined in Louisiana to include “every person who engages in regular or systematic solicitation of a consumer market in the taxing jurisdiction by the distribution of catalogs, periodicals, advertising fliers, or other advertising, or by means of print, radio or television media, by mail, telegraphy, telephone, computer data base, cable, optic, microwave, or other communication system.” See La R.S. 47:301(4)(l). The local collector relied on this provision to impute a tax collection responsibility to marketplaces. Wal-Mart.com, however, argued that this specific “dealer” definition is simply a statutory “jurisdictional hook” to apply to out-of-state sellers who solicit sales within Louisiana, and does not impose the duty on marketplaces to collect and remit sales tax on third-party sales.

Ultimately, the Court agreed with Wal-Mart.com, explaining:

The statutory and regulatory scheme does not contemplate the existence of more than one dealer that would be obligated to collect sales tax from a purchaser. An online marketplace in its role as a facilitator for sales of third party retailers does not fall in these groups.

Further, the Court explained that the contractual arrangement/agreement between Wal-Mart.com and the third-party sellers did not operate so that Wal-Mart.com somehow stepped into the shoes of the third-party sellers as some sort of “co-seller.” Thus, the Court concluded:

Wal-Mart.com did not contractually assume the obligation of the third-party retailers, as dealers, to collect and remit sales tax.

Additionally, the Court held in favor of Wal-Mart.com on a separate, Louisiana-specific procedural issue in this case relating to the use of summary proceedings and the timeliness of Wal-Mart.com’s writ application to the Court. Finding that the Jefferson Parish collector had converted the matter from a summary proceeding to an ordinary proceeding based on the collector’s actions during litigation, the Court ruled that Wal-Mart.com’s writ application was timely, and thus the Court could address the merits of the case. The Court explained:

Undisputedly, there were numerous acts of noncompliance with various provisions of La. R.S. 47:337.61 [the summary proceeding statute], while Tax Collector (the beneficiary of this statutory scheme which chose to proceed by summary proceeding did very little, if anything, to hasten the collection of unpaid taxes or ensure that this matter received preferential treatment by the courts. … Based on the facts and circumstances of this case, Tax Collector by its acts and omissions waived its right to demand strict compliance with La. R.S. 47:337.61, implicitly converting its summary proceeding to an ordinary proceeding.

This case is likely to have far-reaching implications in Louisiana and beyond. Other sales tax administrators in Louisiana would have undoubtedly attempted to rely on the decision to pursue sales tax collections from marketplaces, and perhaps on a retroactive basis. Such action from other local collectors is now unlikely, given today’s decision from the Court. Also, on a national level, even though the Court’s decision will not be binding in jurisdictions outside of Louisiana, other states with similar statutory schemes may be persuaded to follow suit when addressing the scope of collection requirements on marketplaces under their own laws.

The Jones Walker SALT Team is following this issue closely and will provide a more detailed analysis of this decision and its impact on taxpayers, including any potential legislative response.

Jones Walker LLP to Host the Media Financial Management Association’s Media Tax Summit

Jones Walker LLP will host the Media Financial Management Association’s Media Tax Summit on Thursday, December 12.

When: December 12

Where: Jones Walker, LLP, 201 St. Charles Ave., New Orleans, LA, 70170

Hotel:
Renaissance New Orleans Pere Marquette (French Quarter Area Hotel)
817 Common Street
New Orleans, LA 70112

On-Line Reservations Link: https://book.passkey.com/go/MEDIATAXSUMMIT

Call-In: (Ask for Media Tax Summit)
Reservations Toll Free: 877-622-3056
Reservations Local Phone: 504-525-1111

Rate: $119+tax (Guestroom Wi-Fi Included)

Book By: November 18, 2019

Registration Rates:

  • Members – $495 through November 26
  • Non-members – $745 through November 26 (includes one-year trial membership)

NOTE: On November 27th rate increases by $100 ($595 members; and $845 non-members)

Registration
Registration limited to senior tax/financial executives in media companies only. MFM reserves the right to refuse registration requests that do not meet registration criteria. 

Click here to learn more about the program and how to complete registration.

A Big Thanks to Our SALT Seminar Administrators!

We would like to thank (from left to rightKarey Barton, Associate Deputy Comptroller for Tax, Texas Comptroller of Public Accounts, Jan Craig, Associate Commissioner, Income/Franchise Tax, Mississippi Department of RevenueArthur Parham, Entergy Services, Inc.Kelley Askew Gillikin, Acting Director, Tax Policy and Governmental Affairs Division, Alabama Department of Revenue, and Luke Morris, Assistant Secretary of the Office of Legal Affairs, Louisiana Department of Revenue for being our luncheon speakers at our Department of Revenue Roundtable.

Each panelist provided great insight into their respective state’s handling of recent legislation and how we can work together to create solutions between tax administrators and tax payers.

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!

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