Taxes due in Louisiana for items purchased in Texas

Taxes due in Louisiana for Texas purchases

Were you aware that any tax exempt purchases made outside of Louisiana are legally supposed to be claimed on your tax returns?

Some people are aware of their legal obligation, but some people aren't. That obligation includes online orders and groceries bought in Texas, but groceries aren't the only things Louisiana citizens must report.

They thought by going to Texas they'd be getting a better deal, and when they first purchased their tractors four years ago, they did. But in November of 2011, that changed. Ronnie Robertson and Billy West received letters from the Calcasieu Parish School Board stating they owed sales tax, penalties and interest on their purchases at Beaumont Tractor.

"I don't like it at all," said Robertson. "I don't think it's right. I don't think it's fair. I don't like being controlled like that. It's like they're trying to tell me where I can go, what I can do, and where I can go to buy stuff. I don't like it."

The Calcasieu Parish School Board is the central tax collection agency for the parish. According to Rufus Fruge, the director of sales tax for the school system, the letters address a law dating back to the 1940s that requires items purchased out of state to be charged a use tax if sales tax is not paid at the time of purchase. All farm equipment purchased in Texas is tax exempt.

"If you can make a better deal, do it," said Fruge. "But not at the expense of taxes. It's just an unfortunate situation. My heart goes out to them."

Some of those residents who went to Texas to purchase their tractors didn't receive letters until four years after their initial purchase. Some residents had even paid their tractors off.

So why did it take so long for the school board to recognize the problem? Fruge says the parish had no reason to audit Beaumont Tractor, but for some reason Jeff Davis parish did.

"The Jeff Davis parish tax office sent their field auditor to this tractor dealership in Texas," said Fruge. "I was contacted and the auditor had brought back a number of invoices, many of which were from Calcasieu."

West bought his tractor in 2008. He paid the requested amount of taxes as soon as he received his letter, but he still believes he didn't owe the money.

"I didn't know nothing about the law, so I paid it," said West. "They knocked the penalty off."

Fruge agreed to waive the penalty payment for all those who received letters, about 132 Calcasieu parish residents. But he made it a point to emphasize that "not knowing" is no excuse.

"It is your responsibility," said Fruge. "The old adage, ignorance of the law is no excuse. Legally, you do have that obligation. It's something that's hard to deal with when you get a notice four years later."

Robertson believes this is an attempt by the parish to control where Louisiana residents shop.

"They're trying to make us buy in Louisiana, where I can go to Texas and buy something a lot cheaper than I can buy here," said Robertson. "If the people in Louisiana would get competitive with the people over there, there would not be any problem. I would buy here."

So will Robertson pay the few thousand dollars the parish says he owes?

"I really don't know," said Robertson. "I don't know what their options are. I don't know if they can arrest me, if they can try to come get my tractor. They won't get it. I'll burn it to the ground before they get it."

The letter gives residents the option to pay the amount under protest. If residents still refuse to pay, Fruge says the worst case scenario would be placing a lean against their homes and eventually taking them to court.

Fruge also says he will work with the residents by implementing a payment plan that best fits their financial situation, but they will still be charged interest until the amount is paid off in full.

The School Board is halfway through their fiscal year, and already they have collected around five million dollars in audit revenue.

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