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Louisiana shoppers will see sales tax added to Amazon purchases starting Jan. 1, 2017

December 22, 2016

Here's a special end-of-year tax move for Louisiana online shoppers. Make sure your purchase is delivered by Dec. 31.

Online-shopping-woman-bags

That's the last day Pelican State consumers can get anything from Amazon with no sales tax included on the invoice.

On Jan. 1, 2017, the online retail giant will start adding the appropriate sales tax amounts, both state and city, to items shipped to Louisiana addresses. The new tax addition applies to all online sellers, not just Amazon.

Use tax ignored: Technically, Louisiana buyers have always owed the state's sales tax, which currently is 5 percent, and any applicable local sales tax on their purchases even when Amazon didn't calculate the amount.

This levy in Louisiana and the 45 other states and Washington, D.C., that have sales taxes is known as the use tax.

As the name indicates, it is a tax for using an item in your home jurisdiction even if you bought it elsewhere.

But very — very, very, very, very — few consumers pay use taxes, even though many states include a line seeking their collection on state income tax forms. That's why in the tax world, it's known not so jokingly as the useless tax.

Sellers' tax choice: To get around the widespread use tax evasion, Louisiana lawmakers decided to give Amazon and other online sellers a choice.

They can either document the taxable purchases delivered in the state or just go ahead and collect the applicable sales tax.

Amazon decided it was easier to calculate the tax amounts — there's lots of software and outside services that do this — on shipments rather than filling out the paperwork to remind customers of the use tax they owe.

Tattling on tax evaders: The shopper data is similar to the so-called "tattletale tax" law that Colorado implemented. The U.S. Supreme Court on Dec. 12 declined to hear a challenge to the Rocky Mountain state's law.

Opponents of the reporting law said then that the High Court's decision, which they decried as an invasion to consumers' private shopping habits, predicted it would prompt more such tax tactics nationwide.

"Unless Congress steps in and addresses this matter, it's an issue that's only going to intensify, particularly as other states decide to follow Colorado's lead," said Hamilton Davison, president and executive director of American Catalog Mailers Association. "[L]aws like these put an unfair burden on businesses and put personal privacy at risk while bringing government into the home and family."

We'll no doubt see if Davison's prediction is correct. State lawmakers and tax officials tend to follow their neighbors examples when they are successful in bringing in more revenue.

Sales taxes collected in 31 locales: When Louisiana's online sales tax collection law takes effect in just a few days, it will bring to 31 the number of jurisdictions that get sales taxes from out-of-state sellers.

Here's the full list of states, including the upcoming Louisiana, where Amazon and other remote sellers collect sales tax from customers:

Alabama Illinois Minnesota South Carolina
Arizona Indiana Nevada Tennessee
California Kansas New Jersey Texas
Colorado Kentucky New York Virginia
Connecticut Louisiana North Carolina Washington
District of Columbia Maryland North Dakota West Virginia
Florida Massachusetts Ohio Wisconsin
Georgia Michigan Pennsylvania …and counting

Since 5 states don't collect a state-wide sales tax, when the New Year rolls around there will be just 15 states where Amazon and other online shoppers won't face sales taxes added to their invoices.

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TO WRAP UP 2026

It’s over! With October’s extended filing deadline behind us, it is now time to focus on year-end moves to reduce your 2026 tax bill. 

You’ll find ways to do just that on the Tax Tips page (see the More Tax Posts drop-down menu at the top of the blog), as well as the separate tax tip pages for each month, notably October through December. If you’re on the Tax Tips page, you’ll find a monthly list at the end of this column. If you’re on another blog page, you can head straight to the October tips; at the bottom of that tips page you’ll find links to all the other 11 months’ collections of tax advice.

Not to spoil what you’ll find in that tax advice, but it does cover such things as tax deductions for charitable donations, investment moves that could reduce tax due, and ways to max out your tax-favored retirement savings. 

Finally, as the year winds down, things get hectic. There are lots of other things to occupy our time, like the much more fun upcoming holidays. But don’t lose sight of taxes, since timing is key. To be of use, most tax moves must be made by the end of the tax year. That’s Thursday, Dec. 31, which also is the last business day of the year. 

So that you don’t miss that final tax year deadline, also keep an eye on the countdown clock below. It will keep you on top of just how much time is left to make important, tax-saving moves. (Note: I’m in the Central Time Zone, so adjust accordingly for where you live.)

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