Guidelines for out-of-state internet sales tax finalized

Guidelines for out-of-state internet sales tax finalized

Louisiana will soon start collecting sales taxes on online purchases from out-of-state vendors after a state board on Tuesday finalized the rules for such transactions. The state will collect an 8.45 percent flat tax, and send slightly less than half that amount to local taxing authorities.

Number of the Day

553,000 - Number of people counted as homeless across the United States on a single night earlier this year, a slight increase over 2017. (Source: Route Fifty)

Louisiana will soon start collecting sales taxes on online purchases from out-of-state vendors after a state board on Tuesday finalized the rules for such transactions. The state will collect an 8.45 percent flat tax, and send slightly less than half that amount to local taxing authorities. The Louisiana Sales and Use Tax Commission finalized the rate six months after the U.S. Supreme Court’s South Dakota v. Wayfair ruling that overturned a two-decade ban on taxing internet purchases from sellers in other states. The rules are a turning point for Louisiana, which is the only state where local sales taxes are collected at the parish level rather than by the state. These local sales taxes account for 40 to 60 percent of revenues for these local authorities. The Advocate’s Mark Ballard outlines the new rules that will take effect on Jan. 1:

Every three months, the state will send about half of those proceeds — 4 percent of the 8.45 percent tax, regardless of what a particular local charges — to the parishes based on population. The rest goes into state coffers. Charging the sales tax will be voluntary for vendors for another few months — though many already have started collecting the uniform 8.45 percent prior to the official Jan. 1 start date. Revenue Secretary Kimberly Robinson said once the software that can divvy up all the different local rates is in place, remote retailers will be required to charge Louisiana consumers sales taxes on purchases made over the internet.

Louisiana’s difficult road to implementing the Supreme Court ruling stems from its patchwork of local authorities – 370 jurisdictions in all – that collect taxes on purchases in the state. The Advocate editorial board notes that there is still plenty of work to be done:

We commend the members of the clunkily named Sales Tax Streamlining and Modernization Commission, who have been beavering away on this complex problem for several years. … [Rep. Julie] Stokes said that while legislators fought over what sales tax rate would help shore up the state’s finances, many didn’t notice that the state had effectively created some reform within the sales tax code by suspending many of the sales tax exemptions. That’s progress, but not nearly enough. Louisiana is a long way from significant reforms, include a uniform collection system for sales tax. The problem is that local political jobs are at stake. More exemptions ought to be whittled away, too. That is challenged, of course, by those having to pay more tax. The plethora of taxing authorities that larger businesses in Louisiana have to deal with is a long-standing issue. Centralized colleccrition, as the high court said, ought to be a goal for Louisiana’s leaders in this area of the law.

While these reforms are an important step forward, additional changes to the state’s tax structure are needed. The lowest-earning 20 percent of Louisiana households currently pay roughly twice the tax rate of those in the richest 5 percent, a disparity driven largely by high sales taxes.


Senate passes criminal justice reform bill
The U.S. Senate overwhelmingly passed a comprehensive criminal justice reform bill on Tuesday, despite fierce efforts by hard-line conservatives, including Louisiana Sen. John Kennedy, to derail the bipartisan legislation. The First Step Act would scale back some of the harsh federal sentences for non-violent crimes, particularly drug offenses, that were enacted during the 1980s and 90s. The House is expected to pass the bill later this week, sending it to the president, who has spoken out in favor of the legislation. The AP’s Kevin Freking reports:  

The bill gives judges more discretion when sentencing some drug offenders and boosts prisoner rehabilitation efforts. It also reduces the life sentence for some drug offenders with three convictions, or “three strikes,” to 25 years. Another provision would allow about 2,600 federal prisoners sentenced for crack cocaine offenses before August 2010 the opportunity to petition for a reduced penalty. … An array of liberal and conservative advocacy groups rallied in support of the bill. For example, the Koch brothers-backed group, Americans for Prosperity, applauded senators for putting “policy ahead of politics.” The American Civil Liberties Union said the bill was “by no means perfect. But we are in the midst of a mass incarceration crisis, and the time to act is now.”


Voting rights for people on probation up in the air
A law signed by Gov. John Bel Edwards last year restored voting rights to former felons on parole – around 2,200 people in total. But the law’s wording could also be interpreted to apply to the vast majority of people on probation as well, restoring voting rights to an additional 36,000 people who are currently on probation. While corrections and election officials are meeting to discuss the details of the new legislation, it will ultimately fall to Secretary of State Kyle Ardoin to implement the law when it goes into effect on March 1. Picayune’s Julia O’Donoghue reports:

There are about 29,000 parolees and 36,000 probationers in Louisiana, according to the Department of Corrections. Almost all of them, with the exception of a couple of thousand probationers serving special deferred sentences, cannot take part in elections. The law that takes effect March 1 will be an exception to that rule. It states that “a person who is under an order of imprisonment for conviction of a felony and who has not been incarcerated pursuant to that order within the last five years shall not be ineligible to register or vote.” There is widespread agreement that this new language applies to people on parole and probation who have been out of prison for five years with no major infractions. But most people on probation never go to prison for their offense in the first place. So the new language should allow them — even if they haven’t been on probation for five years — to vote as well, according to [Bruce] Reilly.


Black students left out of growth in dual enrollment participation
Dual enrollment courses allow students to earn college credits while still in high school, and the benefits are overwhelming: students who take dual enrollment courses enroll in college at higher rates, graduate sooner and take on less student debt as a result. The number of public high school students taking dual enrollment courses in Louisiana is up 60 percent over the past decade. But barely 1 in 5 of those students is black, even though black students make up 44 percent of all public school students in the state. The Advocate’s Will Sentell reports on this troubling racial disparity:

The fact that just 21 percent of the total are black students — they make up 44 percent of the high school population — has sparked attention and concerns. How do we improve it, asked Marty Chabert, incoming chairman of the Board of Regents, during a joint meeting last week of the Regents and the state Board of Elementary and Secondary Education. “It illuminates the equity gaps that we see,” Higher Education Commissioner Kim Hunter Reed said in an interview. “For a number of students, it is exposure and an opportunity to go from ‘I am not sure I am college material’ to a self-talk that ‘I can do it,’ ” she said.

There’s more that the state can do to reduce the barriers that geography and money often pose to students who would benefit from dual enrollment courses, but don’t currently enroll:

The lack of any statewide framework, like those in North Carolina and Ohio, is one of the stumbling blocks, officials said. “Other states have figured out how to do it very well,” said state Sen. Sharon Hewitt, R-Slidell, who has been involved in efforts to raise the profile of the classes. The lack of any overarching state plan means dual enrollment varies from district to district. Some students pay nothing for the classes. Others are charged up to $800 per course. Students in rural areas complain about lack of access to classes freely available in cities. “It is all a locally brokered thing,” White said. “We really need to get to a point where there is a statewide, minimum level of access for qualified students.” Said Reed, “When opportunity is defined by geography, then we know we have to do something different.”


Happy Holidays from LBP
Tomorrow marks the start of the Daily Dime’s annual holiday hibernation. We thank you for subscribing and for reading this newsletter, and especially to those of you who take the time to provide occasional feedback. The Dime will always be free, but if you feel inclined you may donate to LBP by clicking here. All contributions support the hard work of LBP’s staff to bring you information and analysis about policy issues that affect low-income families in our state.

The Dime will be back on Jan. 3.  


Number of the Day
553,000 – Number of people counted as homeless across the United States on a single night earlier this year, a slight increase over 2017. (Source: Route Fifty)