If you want to make some big purchases on Amazon, the time to do it is before the New Year. Starting on January 1, Amazon is going to charging sales tax on all purchases in Louisiana. The way it will be calculated is based on the address the items are being shipped to.
For example, if you’re having your purchases shipped to Orleans Parish, you would pay the state sales tax and the parish sales tax for Orleans Parish.
Louisiana Department of Revenue Secretary Kimberly Robinson confirmed Amazon will begin collecting both state and local sales taxes for Louisiana based on the address of the recipient. The process is the same for Louisiana retailers who also sell online.
Up until now, consumers were responsible for keeping track of their Amazon purchases throughout the year and self-reporting those purchases when it was time to file taxes.
For New Orleans shoppers, the change means you’ll be paying up to 10 percent more once you complete an order: An Amazon purchase will now include the state’s 5 percent sales tax as well as up to 5 percent in city sales taxes. Orleans Parish charges a 5 percent general sales tax, though that drops to 4.5 percent for food and drug purchases.
Jefferson Parish has a 4.75 percent general sales tax and a 3.5 percent tax rate for food and drug purchases.
Why is Amazon starting to collect taxes now?
Louisiana lawmakers passed a bill earlier this year that gave Amazon and other online retailers a tough choice — either collect sales tax or deal with the paperwork of reminding customers what they bought and how much they owe in taxes every single year.
The bill that forced Amazon’s hand was HB 1121, written by State Rep. Walt Leger (D-New Orleans). Leger was John Bel Edwards’s pick for Speaker of the House. The bill only drew 27 votes against in the state House and 7 votes against in the state Senate. Of course, John Bel Edwards signed it into law.
Of the candidates running for state Treasurer, Julie Stokes voted for the bill while John Schroeder and Neil Riser voted against.
HB 1121 was based on a similar Colorado law. The U.S. Supreme Court declined to hear a legal challenge to Colorado’s law that was brought by online retailers and allowed it to stand. Amazon saw the writing on the wall and was forced to make a decision based on what was in its best interests.
This is being spun in the media as Amazon being persuaded to do “the right thing”, but don’t kid yourself, they were forced into by John Bel Edwards and the Legislature. The end result is less money in the pockets of Louisiana residents.
It is just another tax increase by JBE and his buddies in the Legislature.