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Collecting, Remitting Online Sales Taxes is a Pro-Business Policy
As of January 1, 2017, new e-fairness legislation in Louisiana prompted online mega-retailers like Amazon to collect and remit state and local sales taxes to the proper authorities, just as brick-and-mortar businesses have always been required to do. 
Recently, WWL reported that Senator John Kennedy is unhappy about this new legislation citing that 1) the state should not charge consumers sales tax for online purchases, 2) the Louisiana Department of Revenue is not fairly enforcing the law, and 3) the law threatens to “kill the internet.” Kennedy’s comments not only contain several inaccuracies but also overlook how this policy supports Louisiana businesses by leveling the playing field and allowing them to compete fairly with online retailers. 
Kennedy states, “You’ve got to ask where this money’s coming from, and I can tell you where it’s coming from. It’s not falling from heaven, it’s coming out of taxpayers’ pockets.” His implication is that this represents a new tax; it is not. In theory, consumers were required to keep track of their online purchases and then pay the appropriate amount owed in sales tax as “use tax” on their state tax return. In practice, this “fair use tax law” was nearly unenforceable. Few online shoppers knew about the requirement and even fewer actually reported their purchases.  Estimates place the 2015 collection rate at less than 1 percent.
Kennedy also claims that “[the Louisiana Department of Revenue] ought to enforce the law if they think the money’s due.” This is a specious argument. In effect, Kennedy’s suggestion is a call to expand government oversight exponentially, rather than simply shifting the responsibility from the consumer to the seller, online mega-retailers, in fairness to brick-and-mortars. E-fairness legislation also solves the tax collection issue in a simple, logical way that frees both consumers and the Department of Revenue from regulating individual purchases.
Finally, Kennedy remarks, “If you give government the right to get money as a result of people’s interaction with the internet, government will never stop, and they’ll kill the internet sooner or later.” Here, Kennedy erroneously conflates equitable tax collection policy with government overreach and stifling the free market. In Orleans Parish, where sales taxes are 10 percent, companies like Amazon were granted, in effect, a nearly 10 percent price advantage over brick-and-mortar businesses. Acts 87 and 1129 create a fair marketplace, where Louisiana businesses are no longer at a competitive disadvantage and can thrive and grow to their full potential.
Kennedy’s negative comments are premised on a common misperception about e-fairness, and this is that it places an onerous burden on online retailers. The fact is, Amazon already collects sales taxes in 29 states; there's no reason it cannot do so in Louisiana, too. Further, until this legislation was enacted, Louisiana was leaving millions of dollars it was entitled to in Amazon’s hands. Collecting online sales tax will allow the state legislature to reduce Louisiana’s $600 million budget deficit, including the $304 million shortfall this fiscal year alone. Amazon and Empty Storefronts, a recent report by economic analysis firm Civic Economics, found that Amazon avoided $68.1 million in Louisiana sales tax in 2015. In the midst of a statewide budget crisis, equitably collecting sales tax from Amazon will significantly contribute to funding essential services such as infrastructure repair, economic development projects, and police and fire protection.
E-fairness legislation is not about demonizing online retailers as Kennedy states. It is a pro-business policy that ensures fair and equal taxation for both brick-and-mortar businesses and online mega-retailers. Louisiana based businesses can stay competitive on a national level and keep our state and local economies strong. After all, study upon study shows that local, independent businesses are the largest employers of our residents, they protect our local character, and they keep our hard earned dollars circulating among the individuals who work to support our communities’ well-being.
Kennedy describes collecting online sales tax as a “slippery slope.” I disagree. This legislation is a line in the sand signaling that we stand with our Louisiana businesses, statewide economic growth and job creation.
Abigail Sebton is the Policy and Research Coordinator for StayLocal, Greater New Orleans’ independent business alliance.  Learn more at
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