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Normand v. Wal-Mart.com USA, LLC, 340 So.3d 615, 2019-00263 (La. 1/29/20)

Facts

Wal-Mart.com operates an online marketplace where customers can purchase products from both Wal-Mart.com and third-party retailers. From 2009 to 2015, Wal-Mart.com reported its own sales and remitted the required sales tax but did not include sales made by third-party retailers. Following an audit, the Tax Collector filed a rule for taxes alleging that Wal-Mart.com failed to collect and remit local sales taxes on these transactions. The trial court found Wal-Mart.com liable as a 'dealer' for the sales tax, leading to an appeal and subsequent affirmance by the Court of Appeal.

Wal-Mart.com operates an online marketplace where customers can purchase products from both Wal-Mart.com and third-party retailers. From 2009 to 2015, Wal-Mart.com reported its own sales and remitted the required sales tax but did not include sales made by third-party retailers. Following an audit, the Tax Collector filed a rule for taxes alleging that Wal-Mart.com failed to collect and remit local sales taxes on these transactions. The trial court found Wal-Mart.com liable as a 'dealer' for the sales tax, leading to an appeal and subsequent affirmance by the Court of Appeal.

Issue

Whether an online marketplace like Wal-Mart.com is considered a 'dealer' under La. R.S. 47:301(4)(l) and is therefore obligated to collect and remit sales tax on sales made by third-party retailers through its platform.

At issue in this case is the res nova issue of whether a marketplace facilitator is a dealer under La. R.S. 47:301(4)(l) and is therefore obligated by law to collect and remit sales tax on the sales made by third party retailers through its online marketplace.

Rule

The court applied the definition of 'dealer' under La. R.S. 47:301(4), which includes those who engage in regular or systematic solicitation of a consumer market, but clarified that this does not extend to intermediaries who do not own the property being sold.

The legislature provided a detailed definition of who is a 'dealer.' See La. R.S. 47:301(4). As correctly noted by Tax Collector, the legislature did not limit the term 'dealer' to 'sellers' or persons who sell at retail.

Analysis

The court analyzed the statutory definition of 'dealer' and concluded that Wal-Mart.com, as a facilitator of sales between third-party retailers and consumers, did not meet the criteria to be classified as a dealer. The court emphasized that the actual sellers in the transactions were the third-party retailers, who retained ownership and responsibility for the sales tax obligations.

The court analyzed the statutory definition of 'dealer' and concluded that Wal-Mart.com, as a facilitator of sales between third-party retailers and consumers, did not meet the criteria to be classified as a dealer. The court emphasized that the actual sellers in the transactions were the third-party retailers, who retained ownership and responsibility for the sales tax obligations.

Conclusion

The Supreme Court reversed the lower court's decision, holding that Wal-Mart.com was not a dealer required to collect sales tax on third-party sales, and vacated the judgment against Wal-Mart.com.

The Supreme Court reversed the lower court's decision, holding that Wal-Mart.com was not a dealer required to collect sales tax on third-party sales, and vacated the judgment against Wal-Mart.com.

Who won?

Wal-Mart.com prevailed in the case because the Supreme Court found that it was not legally obligated to collect sales tax on behalf of third-party retailers, as it did not meet the statutory definition of a dealer.

Wal-Mart.com prevailed in the case because the Supreme Court found that it was not legally obligated to collect sales tax on behalf of third-party retailers, as it did not meet the statutory definition of a dealer.

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