Sales Tax Guide for Louisiana

What Is Taxable in Louisiana?

In Louisiana, most tangible personal property is subject to sales tax. However, some items are exempt, such as prescription drugs, prosthetic devices, and certain manufacturing machinery and equipment.

If your business sells taxable goods or services, you need to collect and remit sales tax appropriately. Businesses should also be aware if additional use taxes apply when purchasing out-of-state products.

Who Needs to Collect Sales Tax?

Businesses required to collect sales tax include:

• Retailers with a physical presence in Louisiana
• Online sellers that meet the state’s economic nexus threshold
• Service providers, depending on the service offered

Louisiana enforces an economic nexus threshold of $100,000 in sales or 200 transactions annually. If you meet or exceed this threshold, even without a physical presence in Louisiana, you must register and collect sales tax. Businesses that fail to adhere to this may face penalties and back taxes, making doola’s Bookkeeping service a vital resource for compliance.

How to Register for a Sales Tax Permit in Louisiana

Obtaining a sales tax permit in Louisiana involves the following steps:

1. Prepare necessary documents: EIN, business registration, and business details.
2. Visit the Louisiana Department of Revenue website.
3. Complete the online application for a sales tax account.
4. Obtain your Sales Tax Certificate and commence tax collection.

It is illegal to collect sales tax without a permit, so ensure you’re registered before beginning taxable sales. For assistance, you can engage doola’s expert bookkeeping team to help manage the paperwork and comply with regulations.

How to Calculate Sales Tax in Louisiana

To accurately calculate sales tax in Louisiana, follow these steps:

Step 1:
Identify the correct sales tax rate, which varies based on both the seller’s and buyer’s locations.

Step 2:
Collect the applicable sales tax amount at the time of the transaction.

Step 3:
Maintain meticulous transaction records.

Louisiana mandates monthly, quarterly, or annual sales tax returns, depending on your sales volume. Stay aware of filing deadlines to avoid penalties and interest charges.

Sales tax rates differ across various parishes, so it’s important to ensure you account for any additional local taxes in your calculations.

Common Sales Tax Exemptions in Louisiana

Certain businesses and organizations in Louisiana are exempt from sales tax, including:

• Purchases for resale (with a valid resale certificate)
• Sales to qualifying nonprofit organizations
• Certain agricultural and manufacturing purchases

To claim an exemption, ensure you use the proper exemption certificates and keep detailed records. Incorrectly utilizing exemption certificates can lead to audits and penalties.

Remote Seller and Marketplace Sales Tax Rules in Louisiana

For remote sellers and marketplace facilitators (like Amazon, eBay, Shopify, and Etsy), Louisiana has specific sales tax regulations.

The economic nexus threshold is set at $100,000 in sales or 200 transactions, which obligates businesses meeting these criteria to adhere to Louisiana’s remote seller tax regulations.

Furthermore, marketplace facilitators are responsible for collecting and remitting sales tax on behalf of third-party sellers, streamlining the process for individual sellers.

What Triggers a Sales Tax Audit

The Louisiana Department of Revenue may audit businesses for reasons such as; unfiled or incorrect sales tax filings, persistent late payments, inconsistencies in reported sales versus actual revenue, and misuse of exemption certificates.

To mitigate audit risks, keep comprehensive records of sales, exemptions, and tax payments. Conduct regular internal audits to ensure accuracy in tax filings.

FAQs About Sales Tax in Louisiana

Common queries regarding Louisiana sales tax include:

Does Louisiana tax digital goods?

Some digital goods are taxable under Louisiana law. Always verify the state’s guidelines.

Do out-of-state businesses need to collect Louisiana sales tax?

Yes, if you exceed the $100,000 or 200-transaction threshold.

What happens if I inadvertently overcharge or undercharge sales tax?

Overcharges may require customer refunds, while undercharges may require the business to pay the difference to the state. Accurate records help prevent such issues.

Are any services taxable in Louisiana?

Some services are taxable; consulting the state’s tax guidelines is recommended for clarity on taxable services.

Stay Compliant With doola

Sales tax compliance can be challenging, but staying informed and using efficient tools can help you avoid penalties and ensure smooth operations.

doola provides services and tools to ensure compliance, assisting businesses with financial solutions, tax advice, and bookkeeping services.