Louisiana taxpayers scored a victory on June 22 when the State Senate voted against the implementation of a job-killing Internet tax in a 20-15 vote. This legislation (HB 641) would have forced out-of-state online retailers with no physical nexus to collect and remit sales taxes on purchases made on the Internet.
As has been seen in other states with a similar tax, such as Rhode Island and North Carolina, out-of-state companies are beginning to sever ties with in-state affiliates as a result of this unconstitutional tax requirement thus driving investment and jobs out of the state. While purporting to create a new source of revenue for its ailing economy, the Louisiana Internet tax would have created similarly devastating results.
As more states propose comparable Internet tax legislation, it is important to view how it has affected the states in which it is already implemented. Hopefully more state legislatures will take the step of defeating this unconstitutional tax, like Louisiana, in order to ensure future investment and job growth in their respective states.