Court: Walmart doesn’t owe 3rd party’s online sales taxes

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CHICAGO, IL – AUGUST 15: The Walmart logo is displayed on a shopping cart at a Walmart store on August 15, 2013 in Chicago, Illinois. Walmart, the world’s largest retailer, reported a surprise decline in second-quarter same-store sales today. The retailer also cut its revenue and profit forecasts for the fiscal year. (Photo by Scott Olson/Getty Images)

NEW ORLEANS (AP) — Walmart isn’t responsible for paying sales taxes for items sold through its online “marketplace” for third-party sellers under Louisiana law, the state’s Supreme Court ruled Wednesday.

Wednesday’s 4-3 decision comes in a case involving the New Orleans suburb of Jefferson Parish. It doesn’t set a legal precedent in other states for online facilitators of third-party sales, like Walmart or Amazon, said Bill Backstrom, an attorney for the Jones Walker law firm who filed a brief in support of Walmart.

But Backstrom said people around the country had been watching the case closely. “Other states that have laws similar to Louisiana’s have been watching this case to determine whether or not it could be used, or the same arguments could be used, in other states,” he said. He added that online merchandise sellers weren’t the only ones watching. The case had implications who for anyone who facilitates a sale by someone else, such as a credit car company.

Justice John Weimer, writing for the four-member majority, said neither statutes nor the terms of Walmart’s agreements with third-party dealers obligate it to pay taxes on the third-party sales.

“Clearly, third party retailers are not prohibited from collecting sales tax directly from their purchasers,” Weimer noted. He said the state Legislature would have to address the issue of whether online facilitators are obligated to collect taxes on third-party sales.

Walmart issued and emailed statement saying it was pleased with the ruling and would support legislative efforts to address the issue.

Among the dissenters was Chief Justice Bernette Johnson, who said Walmart, referred to in some court documents as Wal-Mart, fits the definition under state law of a “dealer” required to collect and remit local sales taxes, she said.

“It is also troubling to me that the Marketplace Retailer Agreement — created by Wal-Mart.com — operates to promote and facilitate avoidance of tax payments by consumers, all to the detriment of Jefferson Parish,” she wrote.

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