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Shopping Reminder:

Use Tax Due on Out-of-State Catalog and Internet Purchases

November 27, 2001

BATON ROUGE - Cynthia Bridges, Secretary of the Louisiana Department of Revenue, reminds the state''s Christmas shoppers that they are still obligated to report and pay state sales and use tax on out-of-state purchases made from catalogs or the Internet, even when the seller fails to collect the tax.

“Making a purchase from a seller located outside of Louisiana, whether by telephone, mail, or the Internet, does not exempt a Louisiana taxpayer from reporting and paying the state’s sales tax,” Bridges says. If the seller does not collect the state’s sales tax, the customer must still pay the state an 8% “use” tax. This rate represents 4% state use tax plus 4% local taxes. The local tax share is distributed to local governments.

Bridges says it is easy for taxpayers to report and pay their use tax obligation. Again this year, state individual income tax returns that will be mailed in January 2002 have a specific line on the front of the return for taxpayers to report use tax. “This eliminates the need for taxpayers to fill out and mail a separate use tax worksheet,” Bridges points out. “A taxpayer simply computes the total price for all his purchases and multiplies by 8%. The property’s date of purchase, description, and individual purchase amount are not requested.”

Taxpayers can also report and pay their use tax obligation at any other time during the year by requesting a Consumer Use Tax Worksheet from any office of the Department. The Consumer Use Tax Worksheet may also be downloaded from the Department''s website at www.rev.state.la.us. The worksheet is listed under “Tax Forms,” in the subcategory, “Sales Tax,” Bridges says.

Taxpayers who do not voluntarily report and pay their use tax obligation may receive a bill from the Department of Revenue, Bridges says. She points out that Louisiana participates in an information exchange program with many other states to identify residents who have made large purchases without payment of the tax. Under this program, Louisiana shoppers are billed for the sales and use tax due, plus any interest and penalty.