## Facts

- Wal‑Mart.com USA, LLC (Walmart.com) operated an online marketplace where it sold goods it owned and also hosted listings from third-party retailers.
- Third-party retailers could sell on the marketplace only after entering a Marketplace Retailer Agreement stating the retailer would be the “seller of record” for its marketplace sales.
- The agreement placed responsibility for taxes on the third-party retailer, providing that the retailer was responsible for tax obligations arising from its marketplace sales, including collecting and remitting sales taxes to taxing authorities.
- Customers purchased marketplace items through Walmart.com’s website checkout, where Walmart.com processed payment from the customer and transmitted order information to the third-party retailer.
- Walmart.com remitted the proceeds of the sale to the third-party retailer after subtracting certain fees connected to the marketplace program.
- Louisiana imposed a sales tax on sales of tangible personal property in the state and authorized local governments, including Jefferson Parish, to impose and collect local sales taxes.
- Under the Louisiana sales tax scheme, sales taxes were generally collected by “dealers” from purchasers; the statutory definition of “dealer” included persons engaged in regular or systematic solicitation of customer orders in the taxing jurisdiction.
- From 2009 through 2015, Walmart.com collected and remitted state and Jefferson Parish sales taxes on Walmart.com’s own direct online sales, but it did not collect or remit Jefferson Parish sales taxes on sales made on the marketplace by third-party retailers.
- Newell Normand, the Jefferson Parish Sheriff and Ex‑Officio Tax Collector, sued Walmart.com seeking unpaid Jefferson Parish sales taxes on third-party marketplace sales, plus associated interest, penalties, and other statutory additions.
- The trial court ruled for the Tax Collector, concluding Walmart.com was a “dealer” responsible for collecting and remitting Jefferson Parish sales tax on the third-party marketplace transactions; Walmart.com appealed.

## Issues

1. Whether Walmart.com’s operation of an online marketplace for third-party retailers made it a “dealer” under Louisiana and Jefferson Parish sales tax law, requiring it to collect and remit parish sales tax on third-party marketplace sales.
2. Whether the Marketplace Retailer Agreement’s designation of the third-party retailer as “seller of record” and allocation of tax responsibility to the retailer prevented the Tax Collector from treating Walmart.com as the tax-collecting dealer.
3. Whether Walmart.com preserved constitutional objections to being required to collect local sales tax on the third-party marketplace transactions.

## Decision

- The trial court held that Walmart.com qualified as a “dealer” and entered judgment ordering Walmart.com to pay Jefferson Parish sales tax and related amounts tied to third-party marketplace transactions.
- The Louisiana Court of Appeal, Fifth Circuit, affirmed.
- The court concluded that Walmart.com’s marketplace activities—operating the selling platform, attracting customers, and processing the transaction flow—fit within the broad statutory definition of “dealer” for purposes of local sales tax collection.
- The court rejected the argument that the contract’s “seller of record” language and tax-allocation provisions controlled the statutory dealer inquiry, reasoning that private agreements could not override the tax duties imposed by statute.
- The court declined to reach certain constitutional arguments because they were not properly raised and developed in the trial court.

## Legal Principles

- Local sales tax collection duties in Louisiana are imposed on “dealers” as defined by statute and incorporated into local taxing authority provisions.
- The statutory term “dealer” is defined broadly and can extend beyond the entity labeled the seller in a private contract when the entity’s conduct constitutes regular or systematic solicitation of orders and participation in the sales process in the taxing jurisdiction.
- Contract terms assigning “seller of record” status and tax responsibility to third-party retailers do not, by themselves, control whether another entity qualifies as a statutory dealer obligated to collect and remit sales tax.
- Constitutional challenges generally must be timely raised and adequately presented in the trial court to be considered on appeal.

## Conclusion

The Fifth Circuit held that Walmart.com’s operation of its online marketplace brought it within Louisiana’s broad “dealer” definition, making it responsible to collect and remit Jefferson Parish sales tax on third-party marketplace sales, notwithstanding contract provisions stating third-party retailers were the sellers of record and responsible for taxes.


Normand v. Walmart.com USA, LLC, 263 So. 3d 974 (2019)