Today TaxMama hears from Dixon from Louisiana asks, “Could you advise if a company or business in the state of Louisiana is required to pay sales tax on Internet purchases?”
You’re asking about PURCHASES?
And you’re probably thinking that if you go to a site that doesn’t charge sales taxes except for sales shipped within their own state, you can save money and avoid paying sales taxes.
As it happens, though, Louisiana was one of the first states that added a line to their personal tax returns for something called “Use Tax”.
A use tax is the same thing as a sales tax, except, instead of being collected by the seller, it’s sent in by the buyer.
That line of the form is for folks in Louisiana who made purchases out of state or online, without paying sales tax. Your state wants you to report your purchases with your personal income tax return, and pay the equivalent of the sales tax at that time.
But, you’re a business, so what’s the deal with businesses? Businesses have always had a place on the sales tax forms to include their use tax reporting. Or there are use tax forms.
So, to make a long story short – yes, a business in Louisiana who buys merchandise on the Internet, out of state, or even in the state without paying Louisiana taxes IS required to report those purchases on your sales or use tax returns.
What happens if you don’t? When you get audited, you will have to face the music then.
The use tax concept for businesses operates pretty much the same way in all states. Not all states have gotten around to chasing after it from individuals – yet.
But, remember, you’ll find answers about lots of information about donations and other tax issues, free. Where? Where else? At TaxMama.com
- Ask TaxMama :: Where taxes are fun and answers are free
- Small Business Taxes Made Easy :: Chapter 12 – Businesses Operating on the Internet