New Rules for Remote Sellers in Louisiana

Andrew Decker
July 1, 2020

Beginning July 1, remote sellers making sales into Louisiana must register with the Louisiana Sales and Use Tax Commission for Remote Sellers (“the Commission”) in order to be compliant with new requirements to collect, remit and report state and local sales tax. The information below is intended to explain what companies will be impacted, what remote sellers must do, and when those steps must be completed.

Who Are Remote Sellers?

Remote sellers are businesses without physical presence in the state who either make $100,000 worth of annual sales or have 200 or more separate transaction into the state.

What if I am a Remote Seller that Previously Registered with the State DOR?

Remote sellers previously registered with the Louisiana DOR should receive a notice specifying that their registrations have been transferred to the Commission and which provides additional instructions how to complete their registration with the Commission. Other remote sellers have 30 days to register, and thus must be registered by July 31^st^.

When Must Registration be Completed?

Remote sellers that are currently unregistered have 30 days to register starting on July 1. Accordingly, they must be registered by July 31st.

How Must Remote Sellers Collect and Remit Tax?

Remote sellers must collect the state sales tax of 4.45% and local sales tax at the appropriate local rate. They may not continue to collect tax at the combined 8.45% “Direct Marketers” rate. Both the state and local taxes are reported and remitted to the Commission, and not to the relevant parishes.

When Must Remote Sellers Start Collecting and Remitting?

Remote sellers have 60 days to begin collecting at the appropriate rate, meaning that remote sellers currently collecting at the combined rate have until September 1 to begin collecting tax at the correct rate. Non-collecting remote sellers must also start by September 1.  Additional details on exact process for reporting and paying taxes to the Commission are expected to be released soon.

How Can I Understand How this Impacts My Particular Company?

There are now four classes of Louisiana taxpayers, outlined in the below table.

Class of Taxpayer

Definition

Tax Rate Charged

Registration

Reporting and Remittance

Seller with Physical Presence

The seller has physical presence (e.g. people, property) in the state.

State: 4.45%
Local: Varies
 

Must register with State DOR and appropriate localities.

Must report and remit taxes to both state and locals (parishes).

Direct Marketer

Seller has no physical presence in the state, Seller is not a remote seller or remote retailer, Seller voluntarily registered to collect tax.

Combined State and Local: 8.45%

Must Register with State DOR.

Reports and remits tax to state DOR.

Remote Seller

Seller has no physical presence in the state but makes more than $100,000 annual sales  or has 200 or more transactions in the state.

State: 4.45%
Local: Varies
 

Must register with Louisiana Sales and Use
Tax Commission for Remote Sellers

Reports and remits tax to the Commission.

Remote Retailer

Seller has no physical presence in the state but makes more than $50,000 in annual sales into the state and does not meet the thresholds to be a Remote Seller.

Combined State and Local: 8.45%
 
Or
 
No Tax

Must Register with State DOR.

Must either complete notice and reporting obligations under LA R.S. 47:309.1 or
Report and remit tax as a Direct Marketer 

 

Sign up for Email Updates

Stay up to date with the latest tax and compliance updates that may impact your business.

Author

Andrew Decker

Andrew Decker is a Senior Regulatroy Counsel at Sovos Compliance. Within Sovo’s Regulatory Analysis function, Andrew focuses on international VAT and GST issues and domestic sales tax issues. Andrew received a B.A. in Economics from Bates College and J.D. at Northeastern University School of Law. Andrew is a member of the Massachusetts Bar.
Share This Post
Share on facebook
Share on twitter
Share on linkedin
Share on email

North America ShipCompliant
May 14, 2021
Alabama Is Latest State to Permit Direct-to-Consumer Shipping of Wine

Alabama Governor Kay Ivey signed HB 437 into law on May 13, 2021, making Alabama the latest state to legalize direct-to-consumer (DtC) shipping of wine. With this step, only Delaware, Mississippi and Utah continue to prohibit this popular and valuable means of selling wine. Alabama’s new DtC law will not become effective until August 1, […]

Tax Compliance Tax Information Reporting
May 14, 2021
Anatomy of a Due Diligence Letter

What is unclaimed property due diligence? An unclaimed property due diligence letter is an organization’s last chance at contacting an apparent owner and preventing their property from escheatment. Each state or reporting jurisdiction has its own unique set of requirements and standards. Due diligence letters are typically required to be sent 30 to 120 days […]

EMEA VAT & Fiscal Reporting
May 13, 2021
EU Council Approves DAC7 Rules on Digital Platform Tax Reporting

On 22 March 2021 the EU Council approved DAC7, which establishes EU-wide rules meant to improve administrative cooperation in taxation. In addition, the Directive addresses additional challenges posed by a growing digital platform economy. What is DAC7? In 2011, the EU adopted Directive 2011/16/EU on administrative cooperation in the field of taxation in the EU […]

E-Invoicing Compliance EMEA VAT & Fiscal Reporting
May 13, 2021
Russia Introduces Mandatory E-Invoicing From 1 July 2021

Russia introduces a new e-invoicing system for traceability of certain goods on 1 July 2021. Federal Law No. 371-FZ will amend the Russian Tax Code to introduce the new procedure for the traceability system, which will bring the introduction of mandatory e-invoicing for taxpayers dealing with traceable goods. Since its introduction, B2B e-invoicing in Russia […]

North America ShipCompliant
May 12, 2021
Tennessee Set to Impose Regulations on Fulfillment Houses in DtC Wine Shipments

On May 6, 2021, Tennessee Governor Bill Lee signed HB 742 into law, establishing a slew of new provisions affecting the direct-to-consumer (DtC) shipping of wine in the state. These provisions, however, will not become effective until January 1, 2022. While the bill does impose several new restrictions and requirements on businesses involved in DtC […]