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The Ultimate Guide To Louisiana Sales Tax

Welcome to our handy guide on Louisiana sales tax. We'll walk you through everything you need to know, from the specific sales tax rates in different counties and cities across Louisiana to answering some of the most common questions. Plus, we'll guide you on how to efficiently collect and file your sales tax in Louisiana.

Sales Tax Rate

4.45%

Local Rate?

Yes

Website

Louisiana Department of Revenue

Sales Threshold

$100,000

Tax Line

(855) 307-3893

Transactions Threshold

200

What is Nexus?

You'll need to collect sales tax in Louisiana if you have nexus there. There are two main 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.

Calculating Nexus in Louisiana

Physical Nexus in Louisiana

If you have a physical presence like a store, office, warehouse, or even a sales rep in the state, you're in the realm of physical nexus. This means you've got a tangible tie to Louisiana and need to collect sales tax.

Economic Nexus in Louisiana

Economic nexus kicks in when your business hits a certain level of economic activity in Louisiana. As of 2021, the magic numbers are $100,000 in sales or 200 separate transactions within a 12-month period. Keep an eye on any changes to these thresholds to stay in the know.

Affiliate Nexus in Louisiana

Affiliate nexus is like a family link to Louisiana. If you're closely connected to another company with a strong presence in the state, you might find yourself joining the sales tax party. It's all about those business relationships that extend your reach into Louisiana.

Click-Through Nexus in Louisiana

Click-through nexus happens when you partner with someone in Louisiana (like an influencer or a website) who sends customers your way online. If these referrals lead to more than $50,000 in sales over 12 months, you've got click-through nexus.

Marketplace Nexus in Louisiana

Last but not least, we have marketplace nexus. This is for businesses selling on online platforms like Amazon, Etsy, or eBay. In Louisiana, these big online marketplaces handle sales tax collection for their sellers. So, if you're selling there, they might be taking care of the sales tax bit for you.
Did you know logo

Buy Mardi Gras beads on the street, and it’s tax-free. Buy them in a store, and they’re taxed. In Louisiana, it’s all about where you celebrate.

Sales Tax Registration in Louisiana

Ready to conquer sales tax registration in Louisiana? Here’s how to do it:
  • Gather Your Business Info: Before setting sail, make sure you have all your business details handy. This includes your Federal Tax ID Number (EIN), business name, legal structure, contact info, and what you're selling or offering.
  • Visit Louisiana's Tax Portal: Set your course for the Louisiana Department of Revenue's online portal, Louisiana Taxpayer Access Point (LaTAP). This is your gateway to all things tax-related in Louisiana.
  • Create a LaTAP Account: If you're new to LaTAP, you'll need to create an account. Simply click "New User" and fill in the necessary details. You'll get a confirmation email to activate your account.
  • Log In and Select 'Register a New Business': Once you're logged in, navigate to "Register a New Business" on the dashboard. This is where your registration journey begins.
  • Fill Out the Business Registration Form: Complete the online form with your business details, ownership structure, taxpayer identification, and tax registration specifics. Be thorough and accurate!
  • Review and Submit Your Application: Before you submit, double-check your info for any swashbuckling errors. Once you're sure everything's shipshape, submit your application and keep the confirmation number.
  • Wait for Approval: The Louisiana Department of Revenue will review your application. This usually takes a few days but could stretch up to two weeks during busy times. Keep an eye on your email for approval and your sales tax license.
  • Display Your License: Once you've received your license, display it proudly at your business location, as required by law.

Cost of Registration

Fear not! Registering for a Louisiana sales tax license is free!

Do You Need an EIN?

Yes! Make sure you have your EIN, a 9-digit number from the IRS. It's essential for your sales tax license registration. If you don’t have one, visit the IRS website to get your EIN.

Other Louisiana Agencies to Register With

Depending on your business, you might need to register at other Louisiana state agencies:
  • Louisiana Workforce Commission: For unemployment insurance and wage reporting if you have employees.
  • Louisiana Office of Alcohol and Tobacco Control: For permits if you're dealing in alcohol or tobacco.

Guide to collecting sales tax in Louisiana

Is Louisiana an Origin or Destination Sales Tax State?

First off, let's tackle a common query: Is Louisiana an origin or destination sales tax state? Well, in the Pelican State, sales tax is based on the destination. This means you collect sales tax based on your customer's location.

What Sales are Subject to Sales Tax in Louisiana?

In Louisiana, most sales of tangible items (like furniture, clothing, and electronics) and certain services are subject to sales tax. This includes sales at your shop, online, and even at lively events like festivals. Whether you're selling festive attire at a Mardi Gras bash or gourmet goodies online, remember to collect sales tax on these Louisiana transactions.

Is Software as a Service (SaaS) Taxed?

Yes! Louisiana taxes SaaS, so if you're offering software subscriptions or cloud-based services, make sure to collect sales tax on these Louisiana sales.

What is Exempt from Louisiana Sales Tax?

Not everything is subject to Louisiana sales tax; examples of exempt items include:
  • Prescription drugs and medical devices
  • Certain groceries and food items
  • Sales to qualified non-profits
  • Educational materials sold to schools

Who is Eligible for Louisiana Sales Tax Exemptions?

These groups must present a valid Louisiana sales tax exemption certificate to qualify for exemption. Eligible exemption seekers include:
  • Government agencies
  • Non-profit organizations
  • Schools and educational institutions
  • Religious organizations

What to Do If a Customer is Exempt from Sales Tax?

Here's how to handle a customer exempt from sales tax in Louisiana:

Obtain a copy of their valid exemption certificate.

Verify the certificate details, including the organization's name and address.

Keep the certificate on file for at least three years, as Louisiana law mandates.

Lost a Louisiana Sales Tax Exemption Certificate?

If you've lost a sales tax exemption certificate, fear not! Simply reach out to the customer and ask for a new copy. Maintaining thorough records of these certificates is crucial for defending yourself in a sales tax audit.
Did you know logo

Voodoo dolls are subject to sales tax. In Louisiana, even magic comes with a tax.

Steps for Filing a Louisiana Sales Tax Return

Your filing frequency is set by the Louisiana Department of Revenue based on your tax liability. Most businesses will find themselves in one of these categories:
  • Monthly: If you're bringing in more than $500 in tax each month, you'll be filing and paying by the 20th of the following month.

  • Quarterly: Less than $500 per month but more than $200 per quarter? You'll file and pay by the 20th after the quarter ends.

  • Annually: If your tax liability is under $200 per quarter, you'll file and pay by January 20th of the following year.

Weekend or Holiday Filing

If your filing date lands on a weekend or holiday, don't fret – the due date shifts to the next business day.

Navigating Louisiana Sales Tax Returns

Follow these detailed steps to ensure a successful journey:
  1. Prepare Your Records: Gather all your sales records and tax information for the period you're filing for.

  2. Log In to LaTAP: Visit the Louisiana Taxpayer Access Point and log in (or register if you're new).

  3. File a Sales Tax Return: Select "File a Sales Tax Return" from the dashboard and choose the appropriate filing period.

  4. Enter Sales Information: Fill in the form with your total sales, tax-exempt sales, and sales tax collected.

  5. Deduct Credits/Exemptions: Apply any tax credits or exemptions you qualify for.

  6. Review and Submit: Double-check for accuracy, then submit your return through LaTAP.

  7. Make Payment: Choose your payment method and pay the due tax by the deadline.

Steering Clear of Penalties

To avoid sailing into troubled waters, be mindful of Louisiana's sales tax penalties, such as:
  • Late Filing: A 5% penalty for each 30-day period (max 25%) for late returns.

  • Late Payment: A 0.5% penalty for each 30-day period (max 25%) for late payments.

  • Negligence or Fraud: A hefty 50% penalty for underpayment due to negligence or fraud.

Louisiana's Sales Tax Treasures

Louisiana offers various sales tax incentives for businesses, including:
  • Industrial Tax Exemption Program: Up to 10 years of property tax abatement for eligible manufacturers.

  • Quality Jobs Program: Cash rebates for businesses creating well-paying jobs.

  • Enterprise Zone Program: Tax credits and rebates for businesses in designated zones.

The Kintsugi White-Glove Promise

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Kintsugi’s in-house sales tax experts use over 300,000 business rules to stay up-to-date on regulatory changes.

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Top 5 Tips for Filing Sales Tax in Louisiana

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