Louisiana Jumps on the Bandwagon, Enacts Remote Seller Consumer Notification and Reporting Requirements, Backed by Subpoena Power, Letters Rogatory, and Court Enforcement

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Louisiana Jumps on the Bandwagon, Enacts Remote Seller Consumer Notification and Reporting Requirements, Backed by Subpoena Power, Letters Rogatory, and Court Enforcement


Another state has adopted Colorado-style notice and reporting requirements. On June 17, 2016, Louisiana Governor John Bel Edwards signed into law Act No. 559 (formerly House Bill No. 1121) [To read the law, click here.], imposing customer notification and annual reporting requirements on each “remote retailer” making sales of tangible personal property or taxable services sourced to the State in excess $50,000 per calendar year. See Act No. 559, Sec. 1 (amending La. R.S. 47:309.1). The law applies to remote retailers, i.e., Internet vendors and other remote sellers who make sales of tangible personal property or taxable services where “the property is delivered into Louisiana or the beneficial use of the service occurs in Louisiana,” but who are not required to collect, and do not collect, Louisiana sales and use taxes. Id. Largely copying Colorado’s existing statute, the new Louisiana law requires affected remote retailers to: (i) give notices to their Louisiana purchasers at the time of a sale that the purchaser is required to report Louisiana use tax on his or her individual income tax return; (ii) send annual notices by January 31 of each year to their Louisiana purchasers of the amount and, if available, the specific dates and amounts of their purchases from the retailer, as well as advice on whether the property or service purchased was exempt from tax; and (iii) file with the Louisiana Department of Revenue by March 1 each year a statement including the name and amount of purchases of every Louisiana purchaser. Id. The Act leaves a number of details of the notice and reporting requirements to be established by rules to be promulgated later by the Department. The law takes effect July 1, 2017.

Upping the ante somewhat over recent enactments in Vermont and Oklahoma, the new Louisiana law expressly gives the Secretary of Revenue the authority to enforce the customer notification and reporting requirements through subpoenas, and even by requesting letters rogatory (a legal instrument which allows a court of one state to seek enforcement of a requirement from the courts of another state), issued by a Louisiana court. See id. The statute also contains a section which deems any retailer selling goods or services into the state to be subject to the jurisdiction of the courts of Louisiana, as well as the Louisiana Board of Tax Appeals, for purposes of enforcement of the Act’s requirements by the Secretary.

The Act’s requirements do not apply to in-state, Louisiana dealers, thereby discriminating against interstate commerce in favor of in-state retailers. In Direct Marketing Association v. Brohl, 814 F.3d 1129 (10th Cir 2016), the federal Court of Appeals for the Tenth Circuit held that Colorado’s similar statute did not discriminate against interstate commerce. That ruling remains subject to possible review by the United States Supreme Court. (Brann & Isaacson represents the DMA in the suit.) The deadline for the DMA to petition the U.S. Supreme Court for the issuance of a writ of certiorari is August 29, 2016. In the meantime, it is worth noting that the Tenth Circuit’s ruling is not binding with regard to laws enacted in Louisiana. Of course, if the U.S. Supreme Court were to take up review of DMA v. Brohl, its ultimate ruling in the case would likely be controlling not only as to the Colorado law, but also “copy cat” laws like those in Louisiana and other states.

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