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 

 

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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.
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