Louisiana Imposes New Tax on CBD Products

Under House Bill 560, passed in June of this year, the Louisiana legislature imposed a new excise tax on certain CBD products which takes effect on January 1, 2020. This new tax, which is charged at the point of retail sale, applies at a rate of 3% and applies in addition to existing state and local sales tax. 

The 3% tax will be imposed “industrial hemp-derived CBD products”, which is broadly defined to include any products derived from any part of the plant “Cannabis sativa”. Examples include CBD oils or lotions. However, plants of the “Genus Cannabis” (meaning marijuana) is excluded from the tax.

Retailers who sell taxable products, will be required to collect this tax from their customers starting on January 1 unless the sale is for resale. Any tax collected must then be reported monthly. 

Additional information regarding this new tax can be seen, here, including the history of House Bill 560, and the final, enrolled language imposing the new excise tax. 

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Author

Kaitlyn Smethurst

Katie Smethurst is a Regulatory Counsel at Sovos. Within Sovos’ Regulatory Analysis function, Katie focuses on global sales tax and VAT issues, supporting both the tax determination and reporting engines. Katie received her B.A. in International Relations and Spanish from Roger Williams University and her J.D. from Suffolk University Law School. She is a member of the Massachusetts and New Hampshire Bars.
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