BATON ROUGE, LA (WAFB) - A law passed in 2016 that requires online and catalog retailers to notify shoppers in Louisiana about purchases being subject to state use tax is taking effect.
Louisiana shoppers who bought items from remote retailers in 2017 and were not charged sales tax on those purchases will start receiving notifications from those businesses about the taxes due.
Louisiana Department of Revenue Secretary Kimberly Robinson says the state has lost billions in unpaid sales taxes from online purchases.
"More and more retailers are closing their brick and mortar stores as customers turn to online shopping," Robinson said. "So if people are shopping online and they're not, the retailers not collecting sales tax, it has an impact on our sales tax collection in the state."
Act 569 was passed during the Regular Legislative Session in 2016. The annual notices must be mailed by January 31 each year. Those notices are to:
- Provide the total amount paid by the purchaser for purchases in that preceding calendar year
- Contain a listing of the dates and amounts of purchases, if available
- Explain whether the property or service is exempt from sales and use taxes, if known by the retailer
- Clearly disclose the name of the retailer
- Include a clear statement that Louisiana use tax may be due on the purchases made from the retailer and that Louisiana law requires the payment of an individual's use tax liability on the individual income tax return or the Consumer Use Tax Return (R-1035)
Officials said the notification will be sent in an envelope that reads "IMPORTANT TAX DOCUMENT ENCLOSED." Letters should be sent out on January 31. They added it can also be sent electronically if the buyer authorized the online seller to do so.
Robinson says people will be amazed out at how much they owe.
"I think people will be shocked by how much they purchased online that they didn't pay sales tax on," Robinson said. "There will be people that will be surprised to say, 'I didn't realize I paid sales tax on that,' or they'll be surprised to learn that all of that adds up."