The Legislature was unwilling to go along with Gov. Bobby Jindal’s plan to shift to more sales taxes for state revenues, but one part of the plan deserves passage.
On Capitol Hill, the U.S. Congress is talking about a uniform system that would tax all Internet sales.
Assuming that happens — and there is considerable opposition to that bill on Capitol Hill — how does Louisiana’s tax system cope?
We tend to agree with the governor that eventually some means will be found to charge taxes on Internet purchases. The losses in state and local revenue are great, and today some retailers — under a complex U.S. Supreme Court ruling — are taxed on Internet sales and some are not. That is not sustainable.
This issue is not dependent on whether Jindal ever raises sales taxes. Louisiana’s combined state and local sales tax rates are already high.
So eventually, whenever that is, Louisiana should be prepared to participate in the collection of Internet sales taxes. Unfortunately, Louisiana is one of the few states that allows local authorities, one agency in most parishes, to collect sales taxes for local authorities.
Most states have a single sales tax collector, in deference to business concerns about paperwork and enforcement discrepancies. Local authorities still get their money, but businesses — particularly those with branch stores across the state — have an easier time with paying taxes.
We hope that lawmakers — whatever their legitimate concerns about Jindal’s earlier plans for the tax code — will help businesses by streamlining sales tax collections.