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Education

indirectly involved in any sale
including payment processors, ISOs,
marketers, advertisers and more. An analogous situation would be if the organizer
of a local farmers market were held liable for sales
These third-party intermediaries
typically have no role in the actual tax of every good sold during the farmers market.
sale of goods or services. They help It would be an impossible task and unfair burden
facilitate transactions between buyer
and seller in ways such as hosting a for the marketplace facilitator.
marketplace or advertising to bring
people to that marketplace or seller.

An analogous situation would be if
the organizer of a local farmers mar-
ket were held liable for sales tax of
every good sold during the farmers
market. It would be an impossible
task and unfair burden for the mar-
ketplace facilitator. The ever-evolv-
ing payments ecosystem is unable to
nor should it have to calculate and
pay taxes owed by sellers to differ-
ent state tax agencies.
New issues will arise
if this decision stands

Many legal questions and compli-
cations will arise if this decision
stands. For instance, would the sell-
er still be responsible for collecting
taxes? Could advertisers and others
involved in a transaction possibly
be defined as dealers? It is unlikely
but theoretically possible that taxing
authorities could come after multiple
"dealers" involved in a single trans-
action. While this ruling is unprec-
edented, if it expands into other cir-
cuits or across states, the landscape
of electronic transactions could be
significantly shaken.

Walmart is appealing this decision.
Should it be overturned, things will
likely remain as they were. Howev-
er, should the appeal be denied, the
landscape of electronic payments
and processing could be disturbed,
albeit limited to only a portion of
Louisiana for now.

Frank Dennaoui is a corporate law attor-
ney with Global Legal Law Firm representing
clients in business litigation, transactional
business matters, employment law, and elec-
tronic payment processing. Contact him at
fdennaoui@attorneygl.com.

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