Bayou bounce
Louisiana will raise its sales tax to 5% for five years starting January 1, 2025.
The hike, part of a measure Baton Rouge lawmakers voted in just before Thanksgiving in a special session, includes a cut to individual and corporate income taxes and elimination of the corporation franchise tax. Many digital goods and several services were also added to the state sales tax base.
This 5% tax will be on top of each local sales tax in the state; some Louisiana cities will see an overall sales tax of 10% or higher starting next year. Louisiana already had the highest combined state and average local sales tax in the country at 9.56%, according to research cited from the Tax Foundation.
Source of debate
A county district court judge in Texas has sided with six municipalities in a case that could potentially shift sales taxes for online transactions from the sellers’ cities to the buyers’ cities. The case began after regulatory changes by the Texas Comptroller made certain internet orders not considered received at the “place of business” of the seller. Previously, the regulations generally sourced the local sales tax revenue generated from these sales to the municipality with the seller’s ecommerce fulfillment or sales center.
Coppell had been fighting the comptroller’s regulations for more than three years, claiming with other plaintiffs that the warehouses, distribution centers, and fulfillment centers use expensive, city-supplied infrastructure and services.
Judge Karin Crump of the Travis County District Court decided in favor of the Texas cities of Coppell, Humble, Desoto, Carrollton, Farmers Branch and Round Rock. She ruled that the proposed regulations contradicted the state’s statutory language concerning where the sale of a taxable item is consummated and violated portions of the Texas Administrative Procedures Act.
In the bag?
Will Tennessee be the next state to eliminate sales and use taxes on groceries? Rep. Elaine Davis (R-Knoxville) has submitted a bill in Nashville that would eliminate the tax on retail sales of food and food ingredients, which is now 4% in addition to any local sales taxes. The proposed legislation does allow counties to implement a sales tax on groceries.
Only a handful of other states still have a statewide sales tax on groceries, including Alabama, Arkansas, Hawaii, Idaho, Illinois, Kansas (until January 1, 2025), Mississippi, Missouri, South Dakota and Utah. Many local communities also tax groceries.
Another sales tax for the last frontier?
Anchorage, Alaska, is entertaining a proposed ballot measure for a 3% sales tax in the city.
The sales tax would be charged on most consumer goods, for a total tax of up to $30 per transaction; only the first $1,000 of a sale would be taxable. The tax would sunset after seven years, news reports said. No date has been set for the vote.
Alaska has no statewide sales tax. Unlike the other no-sales tax states of Oregon, Delaware, Montana and New Hampshire, Alaska does have many communities that have banded together to charge sales tax, including on online transactions.
eServices made easy
The Nevada Department of Taxation has launched My Nevada Tax, an eServices platform that will give taxpayers with “a convenient, user-friendly” online portal to manage their tax accounts, file returns, make payments, and access other essential services, including sales and use tax management. Users will also be able to update account information, manage permits and licenses, register businesses, and file returns, among other functions.
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