How Louisiana Sales Tax Continues to Evolve

Andrew Decker
May 12, 2023

This blog was last updated on May 12, 2023

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.

Take Action

Still have questions about Louisiana sales tax? Connect with our experts for the answers.

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

Hungary Supplemental Insurance Premium Tax
EMEA IPT
July 11, 2022
Extra Profit Tax: An Introduction to Supplemental IPT in Hungary

This blog was last updated on October 28, 2024 Update 7 October 2024 by Edit Buliczka Hungarian Tax Office Updates IPT Declaration Form for 2023 The procedure necessary to correct an underdeclared premium figure in Hungary can be complicated. The complexity of a correction for return form 2320 has become even more challenging. Following a […]

2025 bond project
North America Tax Information Reporting
November 4, 2024
The Insurer’s Guide to the 2025 Bond Project

This blog was last updated on November 4, 2024 The regulatory landscape for insurance companies is undergoing significant changes with the Principles-Based Bond Project which is set to take effect on January 1, 2025. These changes, driven by the National Association of Insurance Commissioners (NAIC), will impact how insurance companies classify and value bond investments, […]

E-Invoicing Compliance EMEA VAT & Fiscal Reporting
November 1, 2024
New ViDA Proposal Set for ECOFIN Approval

This blog was last updated on November 1, 2024 The Council of the European Union has released a new proposal regarding the VAT in the Digital Age (ViDA) reform. The proposal aims to modernise and streamline VAT systems across the EU, notably e-invoicing and Continuous Transaction Controls (CTC). Members States will review it on 5 […]

what is peppol
E-Invoicing Compliance North America
October 29, 2024
What it is PEPPOL?

This blog was last updated on October 29, 2024 Peppol E-invoicing explained: What it is and how it works The global adoption of electronic invoicing is accelerating. Governments worldwide are pushing to adopt e-invoicing to digitally transform their national systems and, often, to close the VAT gap. While many countries have introduced their own e-invoicing […]

remote sellers sales tax
North America Sales & Use Tax
October 28, 2024
Will Congress Act to Simplify Remote Seller Sales Tax Collection

This blog was last updated on October 29, 2024 When the United States Supreme Court ruled in 2018, that South Dakota’s law imposing sales tax collection requirements on sellers without in-state physical presence was constitutional, it did not grant states free reign. States are still responsible for ensuring that their sales tax requirements are manageable, […]

dtc shipping laws for craft spirits
North America ShipCompliant
October 23, 2024
Why It’s Time to Reform DtC Shipping Laws for Craft Spirits

This blog was last updated on October 23, 2024 While wine lovers have enjoyed the convenience of direct-to-consumer (DtC) shipping for nearly two decades, the craft spirits market is still not afforded the same access. Outdated and restrictive spirits shipping laws have kept the spirits industry from fully leveraging the benefits of DtC shipping, leaving […]