TEI Files Amicus Brief on the Merits With the Louisiana Supreme Court in the Jefferson Parish v. Wal-Mart.com USA Case.

 
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On February 20, 2019, TEI filed an amicus brief seeking review with the Louisiana Supreme Court in the Jefferson Parish v. Wal-Mart.com USA case. The court accepted review and, on June 19, 2019, TEI filed an amicus brief supporting Wal-Mart.com on the merits.

SUPREME COURT OF LOUISIANA

No. 2019-C-0263

NEWELL NORMAND, SHERIFF AND EX OFFICIO TAX COLLECTOR FOR THE PARISH OF JEFFERSON VERSUS WAL-MART.COM USA, LLC

On Writ of Review to the Court of Appeal, Fifth Circuit,

No. 18-CA-211, Johnson, Chehardy and Molaison, Judges; on appeal from the Parish of Jefferson, 24th Judicial District Court, Div. N, No. 769-149, Hon. Stephen D. Enquist, presiding

TAX EXECUTIVES INSTITUTE'S AMICUS CURIAE BRIEF FILED IN

SUPPORT OF WAL-MART.COM USA, LLC'S BRIEF ON THE MERITS

Respectfully Submitted:

TAX EXECUTIVES INSTITUTE

Alicia Pilar Mata {pro hac vice)

1200 G Street NW, Suite 300

Washington, DC 20005

Phone: (202) 464-8346

Fax: (202) 638-5607

pmata@tei.org

KEAN MILLER LLP

Jaye Calhoun

Linda Akchin

II City Plaza

400 Convention Street, Suite 700

Baton Rouge, Louisiana 70802

Phone: (225) 382-3423

Fax: (225) 338-9133

jaye.calhoun@keanmiller.com

linda.akchin@keanmiller.com

Attorneys for Amicus Curiae

Tax Executives Institute

TABLE OF CONTENTS INTEREST OF AMICUS CURIAE 1 SUMMARY OF THE ARGUMENT 1 LAW AND ARGUMENT 3 I. The Fifth Circuit Erred in Treating the Trial Court's Determination that Wal-Mart.com Was a "Dealer" Under La. R.S. 47:301(4)(l) as a Finding of Fact. 3 II. The Fifth Circuit Erred in Determining that La. R.S. 47:301(4)0) Was Clear and Unambiguous. 4 III. Wal-Mart.com Is Not a "Dealer" Within the Meaning of La. R.S. 47:301(4)0). 5 a. La. R.S. 47:301(4)0) Must Be Interpreted and Understood in the Full Context of this Nation's Nexus Evolution. 6 b. Marketplace Facilitators Are Not "Dealers" Within the Meaning of La. R.S. 47:301(4)0). 10 i. The Legislative History and Context of La. R.S. 47:301(4)0) Confirm It Applies to Out-of-State Sellers, Not Marketplace Facilitators. 10 ii. The Fifth Circuit's Decision Did Not Address the Litany of Questions Arising if La. R.S. 47:301(4)0) Applies to Marketplace Facilitators. iii. It Would Be Inherently Unfair 11 and Inequitable to Apply La. R.S. 47:301(4)0) to Marketplace Facilitators. CONCLUSION 12 VERIFICATION AND CERTIFICATE OF 13 SERVICE 15 TABLE OF AUTHORITIES Cases Pages Cleco Evangeline, LLC v. La. Tax Comm'n, 2001-2162 (La. 4/3/02), 813 So.2d 351 5 Denham Springs Econ. Dev. District v. All Taxpayers, Pro. Owners, 2004-1674 (La. 2/4/05), 894 So.2d 325 3 Jackson v. City of New Orleans, 2012-2742 (La. 1/28/14), 144 So.3d 876 3 McLane S., Inc. v. Bridges, 2011-1141 (La. 1/24/12), 84 So.3d 479 4,5 National Bellas Hess, Inc. v. Department of Revenue, 386 U.S. 753 (1967) 2,6,7,8 Quill Corp. v. North Dakota, 504 U.S. 298(1992) 7,8,9 South Dakota v. Wayfair, Inc., 138 S.Ct. 2080(2018) 6,9 Starks v. Am. Bank Nat'l Ass'n, 2004-1219 (La. App. 3 Cir. 5/4/05), 901 So.2d 1243 3 State v. Carter, 2013-94 (La. App. 5 Cir. 10/30/13), 128 So.3d 1108 3 Willis-Knight Med. Ctr. v. Caddo Shreveport Sales and Use Tax Comm'n, 2004-0473 (La. 4/1/05), 903 So.2d 1071 3 Statutes Ala. Code [section] 40-23-199.2 10 Ariz. Rev. Stat. [section] 42-5001 (8) 10 Ark. Code Ann. [section] 26-52-111 10 Cal. Rev. & Tax Code [section] 6042 10 Colo. Rev. Stat. [section]39-26-105(1.5) 10 Conn. Gen. Stat. [section] 12-408e 10 D.C. Code Ann. [section]47-2002.01a 10 Haw. Rev. Stat. [section]237-1 10 Idaho Code [section] 63-3620E 10 35ILCS105/2d 10 Ind. Code [section] 6-9-29.5-2 10 Internal Revenue Code [section] 501(c)(6) 1 Iowa Code [section] 423.14A 10 Ky. Rev. Stat. Ann. [section] 139.450 10 La. Civ. Code art. 9 4 La. Civ. Code art. 12 4,5 La. Civ. Code art. 13 4 La. R.S. 47:301(4) 10 La. R.S. 47:301(4)(j) 5 La. R.S. 47:301(4)(l) passim La. R.S. 47:303(C) 11 Md. Code Ann. Tax-Gen. [section] 11-403.1 10 Minn. Stat. [section] 297A.66 10 Neb. Rev. Stat. [section]77-2701.13 10 N.J.S.A. [section] 54:32B-3.6 10 N.M. Stat. Ann. [section] 7-9-3(J) 10 N.Y. Tax Law [section]1132(1) 10 N.D. Cent. Code [section] 57-39.2-02.3 10 Former N.D. Cent. Code [section] 57-40.2-01(6) 7 Okla. Stat. [section] 1392 10 Pa. Stat. Ann. [section]7213.1 10 R.I. Gen. Laws [section]44-18.2-3(1) 10 S.C. Code Ann. [section] 12-36-1340(5) 10 S.D. Codified Laws [section] 10-65-5 10 Tex. Tax Code [section] 151.0242 10 Utah Code Ann. [section]59-12-107.6 10 Va. Code Ann. [section]58.1-612.1 10 Vt. Stat. Ann. [section] 9713 10 Wash. Rev. Code [section] 82.08.053 10 W.Va. Code[section] ll-15A-6b 10 Wyo. Stat. [section]39-15-502 10 Other Authorities Bloomberg Tax, Tax Management Portfolio 1420-2nd: Limitations on States' Jurisdiction to Impose Sales and Use Taxes, Detailed Analysis, E. State Legislation 7 Hellerstein, Hellerstein 8c Swain, State Taxation [paragraph] 12.01 (Thomson Reuters/Tax 8c Accounting, 3rd ed. 2001, with updates through Apr. 2019) 6 Hellerstein, Hellerstein & Swain, State Taxation f 19.03 8 Louisiana H. Comm. Ways and Means, Minutes, June 5, 1990, H.B. 1560 (substd by H.B. 2093) at 8 (statement of Rep. Deano) (attached at Ex. A) 7 Louisiana Sales and Use Tax Commission for Remote Sellers, Remote Sellers Information Bulletin 18-002 (Dec. 18, 2018) 5, 12 Multistate Tax Commission, Marketplace Facilitator Work Group, Final White Paper (issued Nov. 20, 2018) available at www.mtc. gov/getattachment/Uniformity/Project-Teams/ Wayfair-Implementation-Informational- Project/White-Paper-Final-clean-v4.pdf. aspx?lang=en-US 9, 10 National Conference of State Legislatures, Model Legislative Proposal, available at www. ncsl.org/Documents/fiscal/2016_Sales-Use_Tax%20Nexus_.pdf 8, 9 Pa. Sales Tax Bulletin No 2018-01 (Jan. 26,2018) 10 Streamlined Sales Tax Governing Board, Inc., About Us, available at www. streamlinedsalestax.org/about-us/about-sstgb 8 U.S. Government Accountability Office, GAO-18-114, Sales Tax--States Could Gain Revenue from Expanded Authority, but Businesses Are Likely to Experience Compliance Costs, 14 (Nov. 2017), available at www.gao.gov/assets/690/688437.pdf 13 Interest of Amicus Curiae

Tax Executives Institute, Inc. ("TEI" or "the Institute") is the largest organization representing taxpayers' interests on issues associated with tax administration. It is a voluntary, nonprofit association of corporate and other business executives, managers, and administrators responsible for the tax affairs of their employers. TEI was organized in 1944 under the laws of the State of New York and is exempt from taxation under section 501(c)(6) of the Internal Revenue Code. TEI dedicates itself to the development of sound tax policy, the uniform and equitable enforcement of tax laws, the minimization of administrative and compliance costs for governments and taxpayers, and the vindication of taxpayers' rights. TEI's members are employed by a broad cross-section of the business community. As in-house tax professionals, TEI's members evaluate tax laws, advise their companies regarding the tax consequences of various transactions and business decisions, and make practical judgments regarding their tax compliance obligations, including determinations regarding which states and localities they must register with for the collection and remittance of sales and use tax. TEI's members have a vital interest in ensuring they are provided with adequate notice of their registration, collection, and remittance responsibilities so they can structure their business activities and processes to meet these requirements.

The Fifth Circuit's sanction of Jefferson Parish's ("Jefferson Parish" or "the Parish") attempt to shift tax liability to Wal-Mart, com is alarming. Stripped to its core, the Parish's effort to hold Wal-Mart.com liable for sales tax based on sales made by third-party sellers is nothing more than an illegitimate money grab seeking to recover tax revenues that Jefferson Parish consumers failed to remit. Jefferson Parish's attempt to do this--long after the transactions occurred, using a statute not intended for this purpose, and without advance notice or guidance for taxpayers--contradicts basic principles of fair tax administration. TEI is concerned parish tax collectors across Louisiana and the State of Louisiana ("State") may also seek to deny taxpayers' rights if this Court does not reverse the Fifth Circuit Court of Appeal's decision.

Summary of the Argument

The Fifth Circuit Court of Appeal erred by treating the trial court's determination that Wal-Mart.com was a "dealer" under La. R.S. 47:301(4)(l) as a finding of fact and by holding that the meaning of La. R.S. 47:301 (4)(l) was clear and unambiguous. The Fifth Circuit then further erred by failing to consider the implications for deeming marketplace facilitators as "dealers" within Louisiana's sales and use tax regime, by ignoring the legislative history and intent of La. R.S. 47:301 (4)(l), and by summarily concluding the trial court's finding of fact was not manifestly erroneous. This Court's intervention is necessary to correct the Fifth Circuit's erroneous decision and to ensure its decision does not encourage other Louisiana parishes or the State to shift tax liabilities from sellers and their purchasers to marketplace facilitators.

The legislative history and statutory scheme confirm the Louisiana legislature enacted the definition of "dealer" in La. R.S. 47:301(4)(l) when states were challenging the physical presence rule established in National Bellas Hess, Inc. v. Department of Revenue, 386 U.S. 753 (1967), and the definition was intended to apply to out-of-state sellers lacking physical presence in the state, not marketplace facilitators. Moreover, Jefferson did not provide marketplace facilitators notice regarding its intent to hold them responsible for this purported liability or guidance regarding how it would administer the...

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