Reporting in State and Local Tax with Paul Williams
Hosts & Guests
Paul Williams, Senior Tax Correspondent at Law360
Meredith Smith, State and Local Tax Senior Manager
Judy Vordran, Leader, Educator, Advocate, J.D., CPA
Basically, Well, and so kind of on that note in, in talking about home rule land, um, you know, we've got Louisiana, the wholesale bead case, um, is ongoing and, you know, has some issues arising out of home rules. What, what are some of the, the items related to wholesale bead that you all are, you know, watching and reporting?
Sure. Well, well there are a few, uh, you know, certainly the case itself, uh, which is, uh, currently un appealed. Before the Fifth Circuit, uh, you know, federal judge had dismissed the Ted Beats challenge on the Tax Injunction Act grounds saying that, you know, federal courts didn't have jurisdiction cuz uh, you know, it involves a state tax issue.
And so that's really the issue that's on appeal now. Um, not so much the merits of whether or. Louisiana's decentralized, uh, local sales tax system, you know, could potentially, um, you know, impose undue burdens under, under Wayfair. Uh, the taxpayers made the case that, or at least argued that, uh, the Tax Injunction Act shouldn't apply here because they're challenging the, the burdens themselves, the alleged burdens themselves instead of an actual tax assessment.
So they think that's kind of an exception to the Tax Injunction Act. Uh, that's really where it's before. What's before the court now at the Fifth Circuit, and I don't think any briefs have been filed yet there, uh, on appeal. But, uh, kind of related to that, there was a constitutional amendment that Louisiana voters had, uh, rejected last year.
It was closed, I think it was 51 49 or 52 48 that they voted against, uh, creating a single unified central sales tax collection system for both in-state and outta state. Uh, Businesses. Cause right now the Louisiana does have their centralized remote seller commission for, uh, for remote sellers to file through as one portal.
And in-state, businesses have to file with each parish in which they, in which they do business. And so after the voters rejected that amendment last year, there was an effort this year to get it on the ballot again. And you know that the Halstead be case was filed just a few days after the constitutional amendment, uh, result.
From last year and there, there was a push to get it on the ballot again this year, and it got all the way to the end. It just needed one final concurrence vote from the Louisiana House and it didn't come up. And essentially the local government groups there had, you know, had some opposition to it throughout.
Uh, they thought that they wanted it to say more that. The single commission would handle the remittance of taxes instead of the collection and the sponsors and proponents of the amendment said, Well, collection is what this is all about. Uh, you know, so there's, there's a push and pull there as to, you know, how much power the local governments wanted to retain for the local tax collection versus, you know, what the, the sponsors thought that the state, you know, may need to do is, you know, some have argued to, to comply with Wayfair.
Uh, it, it is interesting to note though. Halted be case that, uh, you know, the, the complaint that halted be filed didn't actually mention the remote sellers commission, at least not by name. And that was an argument that the, the parishes and the State Department of Revenue, which was also involved in the case, uh, had made, you know, that they already offered this, symbolized the centralized sales tax collection entity.
Um, you know, that they've tried to reduce the burdens. Uh, for remote sellers. Uh, I can tell you counsel for , Joseph Bishop henchman from the National Taxpayers Union. Uh, you know, I asked him about that in one of our stories and, and he had said, Well, centralized filing isn't everything. The commission still directs you to the individual parishes to figure out some of the local rules, and it doesn't do enough.
Um, but that is one element of the case, you know, if the merits do get decided on, is. Louisiana has a centralized collection effort in place. Um, I guess you know, the question is, is it enough? Um, but you know, certainly right now they, they're collecting and um, I think their latest report said that they collected more than, um, Yeah.
Actually I'll stop that cause I didn't look at the report before we came on, but, um, You know, the remote Sellers Commission has been, you know, operational for a couple years now and it is collecting revenue, uh, for the state. Yeah, well, it'd be very interesting to see with our subsystem in Colorado as well.
Arizona's been very successful with the cities. The home World City's being collected, the state level for more than four years, so clearly there's more money going out to them and being collected because it.
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Topics Discussed in this Episode:
- Halstead Bead’s case in Louisiana and other cases related to home rule cities
- Wayfair’s lawsuit against Lakewood for a $600K sales tax bill
What You Will Discover:
- [00:26] Halstead Bead’s case in Louisiana and home rule jurisdiction
- [07:27] Wayfair’s lawsuit against Lakewood
- [11:02] Trends from a litigation perspective
- “There’s a push and pull there is to how much power the local governments wanted to retain for the local tax collection versus what the sponsors thought that the state may need to do is what some would argue to comply with Wayfair.” – Paul Williams [02:53]
- “It’s very interesting how we’ve given this authority to the locals, which I appreciate why they need it. I appreciate why our states need authority, because the federal government doesn’t give them enough money, but it does create a lot of complexity in tax compliance.” – Judy Vorndran [06:04]
- “When you look at both Wayfair’s case now and the Halstead Bead case, it does bring up the question of to what extent, if any, do home rule jurisdictions… what are limitations to their authorities potentially or what burdens can varying local rules create for companies that just want to comply with the Wayfair decision?” – Paul Williams [07:34]
- “Since Wayfair came down, and different practitioners we’ve talked to and different tax conferences we’ve reported on, practitioners have raised the question as to whether or not Wayfair gave local governments the authority to also impose economic nexus for sales and use tax.” – Paul Williams [08:17]
Paul Williams on Law360: law360.com/tax-authority/search?q=reporter:%22Paul+Williams%22
Paul Williams on LinkedIn: linkedin.com/in/paul-williams-56183567
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