Despite Louisiana’s struggles to adopt meaningful sales tax simplifications, it implemented the Sales and Use Tax Commission for Remote Sellers, creating a single spot for state and local sales tax filing. Unfortunately, this system does not address the complexities of local sales tax rules.
Prior to Wayfair, Louisiana allowed “volunteer” remote sellers to use their 8.45% combined Direct Marketers but opted not to offer the same simplification to remote sellers that have crossed the state’s primary economic nexus threshold. Please note, however, that this simplified rate is still available to sellers under the primary economic threshold.
Louisiana law requires that any remote seller who qualifies as a “dealer” collect and remit state and local (parish and city) sales taxes on their remote sales of goods and taxable services into Louisiana. Remote sellers qualify as dealers if their annual sales into Louisiana exceed $100,000 or if they make at least 200 separate sales into Louisiana. In determining whether these thresholds are met, remote sellers should exclude any sales made through an electronic marketplace so long as the marketplace is obligated to collect the sales tax in place of the seller. While the above referenced Commission for Remote Sellers simplifies the reporting and remittance process for such sellers the ability of parishes to set their own sales tax rates and sales tax exemptions means that the determination of how much tax to charge on a given sale can be challenging for out-of-state businesses.
Marketplace facilitators are required to collect and remit state and local sales tax on all remote sales that it transacts or facilitates into Louisiana. Marketplaces are also subject to the above threshold and should include both their own sales and any sales they facilitate when determining whether they meet the threshold.
A secondary economic threshold is used to determine whether an out-of-state seller qualifies as a “remote retailer.” Any out-of-state business that has annual gross receipts in excess of $50,000 in Louisiana is required, per Louisiana Revised Statue 47:309.1, to issue use tax notices to their customers unless the remote retailer collects sales tax on their Louisiana sales. (As remote sellers with over $100,000 in sales are required to collect sales tax, they are relieved of the obligation to issue use tax notices). Additionally, remote retailers are subject to a requirement to furnish annual statements to the Department of Revenue regarding the value of sales to individual Louisiana purchasers.
Out-of-state sellers who are not required to collect sales tax may choose to voluntarily collect Louisiana tax. Such sellers can avail themselves of the “Direct Marketers” rate referenced above and avoid the complexities of local sales tax. This option is not available to any remote sellers who exceed the primary threshold of $100,000 annual sales.
Louisiana continues to take steps to simplify the collection of sales tax on remote sales, however, as long as local tax complexities remain out-of-state sellers will continue to struggle with their tax obligations.
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