Iowa and Louisiana Take Steps Towards Sales Tax Fairness

The campaign for sales tax fairness continued to heat up this week, with legislative activity in Iowa and Louisiana.

Iowa

On Tuesday, an Iowa Senate Ways and Means Sub-Committee passed legislation that would clarify sales tax laws so that any company with a warehouse, distribution center, or office in the state would be required to collect and remit sales tax to the state.

According to the DesMoines Register [1], the bill, Senate File 2309 [2], is “largely preemptive.” Iowa’s legislative move was spurred by actions in Texas, where the state is now seeking $269 million in back taxes from Amazon.com. Texas argued that Amazon.com should have been collecting and remitting sales to the state since it had a distribution facility in the state, constituting nexus.

The nonpartisan Legislative Services Agency estimates that Iowa’s current sales tax loophole costs the state $6.8 million per year.

 “I believe [the current sales tax inequity] put Iowa retailers at a disadvantage when people are buying online and escaping our taxes,” Sen. Pam Jochum (D-Dubuque) told the DesMoines Register. “That’s not to mention that the sales tax is something that helps support all of our services, including schools at the local level and cities.”

With its passage by the three-member subcommittee, the bill is now being reviewed by the full Senate Ways and Means Committee.

The American Booksellers Association is calling on member bookstores in Iowa to reach out to their state senators, especially if they are members of the Senate Ways and Means Committee [3], and to the Committee chairman, Sen. Joe Bolkcom [4], to urge them to support SF 2309. To make this outreach easier for Iowa bookstore members, ABA has created a template letter [5] (entitled “Letter to your legislator”) that they can adapt and send to their state senators.

Louisiana

On Wednesday, March 28, Rep. Eddie Lambert (R-Gonzales) filed HB 1027, legislation that would that clarify the state’s sales tax law so that any remote retailer with affiliates in the state acting as sales agents would be required to collect and remit sales tax on purchases made by Louisiana residents. The bill would also ensure that any remote retailer that “holds a substantial ownership interest, directly or through a subsidiary,” would be required to collect and remit sales tax as well.

ABA is calling on member bookstores in Louisiana to urge their state representatives to support HB 1027. To make this outreach easier for Louisiana bookstore members, ABA has created a template letter [6] (entitled “Letter to your legislator”) that they can adapt and send to their lawmakers.