Sales Tax Fundamentals
Get up to speed on the basics of sales tax
What is the sales tax rate in Louisiana?
The base state sales tax rate is 4.45% as of July 1, 2018. Local sales tax rates can range from 0% to 8.5%, depending on the city and parish.
Do you need to collect sales tax in Louisiana?
You’ll need to collect sales tax in Louisiana if you have nexus there. There are two ways that sellers can be tied to a state when it comes to nexus: physical or economic. Physical nexus means having enough tangible presence or activity in a state to merit paying sales tax in that state. Economic nexus means passing a states’ economic threshold for total revenue or the number of transactions in that state.
Do you have physical nexus in Louisiana?
Louisiana considers entities “Engaging in business in a taxing jurisdiction” to have physical nexus. This definition can be found in Louisiana Code Sec. 47:301(4).
Engaging in a business in the taxing jurisdiction means and includes any of the following:
- Maintaining directly, indirectly, or through a subsidiary, an office, distribution house, sales house, warehouse, or other place of business
- Having an agent, salesman, or solicitor operating within the taxing jurisdiction under the authority of the seller regardless of whether the place of business, agent, salesman, or solicitor is located in such taxing jurisdiction permanently or temporarily
- Any person who makes deliveries of tangible personal property into the taxing jurisdiction other than by a common or contract carrier.
- Any person who sells at retail any tangible personal property to a vending machine operator for resale through coin-operated vending machines.
- Any person who makes deliveries of tangible personal property into the taxing jurisdiction in a vehicle owned or operated by said person
Do you have economic nexus in Louisiana?
Effective January 1, 2019, Louisiana considers vendors who make more than $100,000 in sales annually in the state or more than 200 transactions in the state in the previous or current calendar year to have economic nexus. This means the state considers these vendors obligated to collect sales tax from buyers in the state. You can read Louisiana’s economic nexus guidance for sellers here.
Is what you’re selling taxable?
Services are generally exempt from sales tax in Louisiana. However, businesses that make repairs to tangible personal property and the furnishing of telecommunications services are not exempt.
In Louisiana, sales tax is required to be collected from tangible, physical products sold to a consumer. For example, food sold for preparation and consumption in the home is tax exempt at the state level, though counties and other local jurisdictions may levy a tax. Meals prepared by a restaurant or business are subject to the state sales tax.
In the Orleans Parish (which includes the city of New Orleans), that rate for a meal prepared by a business would be 9.45% — the combination of a 4.45% base state tax rate and a 5% local tax rate. In Baton Rouge, the rate for that same type of meal is slightly higher at 9.95%, since the local sales tax rate is 5.5%. For more detailed information on whether or not food is taxable in Louisiana, this explainer can help.
Is SaaS taxable in Louisiana?
SaaS is non-taxable. (Source)
How to get a sales tax permit in Louisiana
You can register for your Louisiana sales tax license at the Louisiana Department of Revenue’s site “GeauxBiz.com.” Start with a new business registration.
You need this information to register for a sales tax permit in Louisiana:
- Personal identification info (SSN, address, etc.)
- Business identification info (EIN, address, etc.)
- A description of your business
- Your NAICS code
It’s free to apply for a sales tax permit, but other business registration fees may apply.
Collecting Sales Tax
Louisiana is a destination-based sales tax state. So you should be charging everyone in Louisiana the rate where the item is being delivered. That could include a combination of state, county, city, and district tax rates.
Should you collect sales tax on shipping charges in Louisiana?
Louisiana makes it fairly similar for any seller to not pay sales tax on shipping and handling. All the seller needs to do is follow the three rules below:
- List the shipping and handling charges separately from the charges for goods on the invoice.
- Allow the buyer, if she so chooses, to pick up his item from the seller.
- If ordering a product for a buyer from another seller, have that seller ship directly to the customer. This way the buyer won’t have to pay the sales tax on the shipping and handling to you.
When are Returns Due?
When you file and pay Louisiana sales tax depends on two things: your assigned filing frequency and your state’s due dates.
How often will you file sales tax returns in Louisiana?
States assign you a filing frequency when you register for your sales tax permit. In most states, how often you file sales tax is based on the amount of sales tax you collect from buyers in the state.
In Louisiana, you will be required to file and remit sales tax either monthly or quarterly.
Louisiana sales tax returns are always due the 20th of the month following the reporting period. If the filing due date falls on a weekend or holiday, sales tax is generally due the next business day.
Filing Sales Tax
- Calculate how much sales tax you owe
- File a sales tax return
- Make a payment
How to Calculate How Much Sales Tax You Owe in Louisiana
Calculating how much sales tax you should remit to the state of Louisiana is easy with TaxJar’s Louisiana sales tax report.
All you do is connect the channels through which you sell – including Amazon, eBay, Shopify, Square and more – and we’ll calculate exactly how much sales tax you collected. All the information you need to file your Louisiana sales tax return will be waiting for you in TaxJar. Try a 30-day free TaxJar trial today.
How to File and Pay Sales Tax in Louisiana
To file and pay your Louisiana sales tax you have some options:
- File online at the Louisiana Taxpayer Access Point: You can remit your payment through their online system.
- Pay by credit card.
- AutoFile – Let TaxJar file your sales tax for you. We take care of the payments, too. You’ll never have to worry about spreadsheets, calculations or filling out complex sales tax returns.