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KPMG report: Remote sellers collecting tax (Louisiana, Virginia)

KPMG report: Remote sellers collecting tax

State tax departments continue to issue guidance in response to the U.S. Supreme Court’s decision in “South Dakota v. Wayfair, Inc.”

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Louisiana

A remote seller may volunteer to collect tax on all sales into the state at a rate of 8.45% (a rough average of combined state and local rates).

The Department of Revenue on May 17, 2019, issued a “Remote Sellers Information Bulletin” providing guidance on how Louisiana purchasers can request refunds of local sales and use tax if the seller collects at the combined 8.45% rate and the actual state and local rate due on the transaction is less than that. In this situation, Louisiana taxpayers may apply for a refund once per calendar year. For example, refunds requested on purchases made from January 1, 2018, through December 31, 2018, may be submitted on or after July 1, 2019.

The Department of Revenue will be issuing refund forms and affidavits in the near future. At this point Louisiana cannot mandate that remote sellers collect local tax on all sales, as state law requires that the Department of Revenue establish a platform to receive returns and remittances for all state and local taxes from remote sellers before such a requirement can be imposed. The Department does not anticipate having the platform in place until later in 2019. Please stay tuned to TWIST for additional Wayfair-related updates. 

Virginia

The Department of Taxation released guidelines [PDF 138 KB] for remote sellers and marketplace facilitators. Although these guidelines are not regulations subject to Virginia’s Administrative Process Act, they do represent the Department’s interpretation of the remote seller / marketplace collection laws that are effective July 1, 2019.

In addition to summarizing the legislation, the guidance provides additional details and examples to aid remote sellers and marketplace facilitators. Sourcing is one of the topics addressed in the guidelines. In Virginia, sales are generally sourced to the business location of the seller involved with the transaction, even if the product is subsequently shipped to another location.

The guidelines provide that marketplace facilitators may use destination-based sourcing rules if they are unable to associate an order with a physical place of business in Virginia. The guidelines also outline instances in which a marketplace facilitator may apply to the Department of Taxation for a waiver of the obligation to collect and remit on facilitated transactions. Finally, the guidelines provide additional information on registration requirements and the Department’s efforts to simplify the collection, remittance, and record keeping requirements for remote sellers and marketplace facilitators.


Read a May 2019 report prepared by KPMG LLP

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