Louisiana could soon be collecting sales tax from online retailers, thanks to a recent decision by the United States Supreme Court.
"The most significant thing the Supreme Court said was that a store doesn't have to have physical presence in a state for the state to collect sales taxes on transactions to its residents," said Robert Travis Scott, president of the Public Affairs Research Council of Louisiana.
That change immediately left state lawmakers wondering how much new revenue is on the table. The news brought tax negotiations in the Legislature to a temporary halt last week.
"Once it gathered its senses," explained Scott, "most people in the Legislature realized that the amount of money we're talking about isn't going to create a sea-change in our revenue picture for this state."
Mostly because large online retailers, like Amazon, have already been charging sales tax in Louisiana.
"What consumers haven't really seen is taxes being charged on those little companies, those little things that happen to be about your hobby," he said. "The small company somewhere that happens to cater to those things you happen to like." Websites like eBay and Etsy, for instance.
Scott says those online marketplaces are going to present a bigger challenge when it comes to collecting sales tax. Especially in Louisiana, where the state and local parishes don't always apply sales tax in the same way. The state has been taking steps to simplify the collection process for these so-called remote sellers — companies that don't have a physical location in Louisiana. In the end, Scott says this change will mean more revenue for the state, but those expectations should be tempered.
"We're talking about tens of millions of dollars here, not hundreds and hundreds of millions of dollars," he said.