What is the sales tax rate in Louisiana?
In Louisiana, the state sales tax rate is 4.45%, but local parishes can impose additional sales taxes, which range between 0% and 8.5%. This can make the total sales tax rate considerably higher. In fact, when you add up the state, parish, and city sales taxes, the total can be as high as 11.45%.
So it’s essential for businesses operating in Louisiana to be aware of these local tax rates and ensure that they’re collecting the correct amount from their customers. The Louisiana Department of Revenue provides resources and tools for businesses to find out the current sales tax rates in different parishes and cities.
Sales Tax Louisiana: Should you already be collecting sales tax in Louisiana?
In Louisiana, a business must collect sales tax when it sells tangible personal property or certain services within the state. If your business has a physical presence in Louisiana, such as an office, warehouse, or retail store, you are required to collect sales tax. This is known as having a “sales tax nexus.”
But physical presence isn’t the only way to establish a nexus. If your business meets the economic nexus threshold or engages in certain activities in Louisiana, you’ll also need to collect sales tax.
Louisiana Physical Sales Tax Nexus
A physical sales tax nexus in Louisiana can be established by something as grand owning or leasing property in the state or as trivial as storing inventory or employing a remote sales person in the state.
Sales Tax Physical Nexus checklist for Louisiana
If your business has any of the following, you likely have a physical sales tax nexus in Louisiana:
- A physical office or store
- Employees or contractors in the state
- Warehouses or distribution centers
- Inventory stored in a third-party location (such as a fulfillment center)
If your business has a physical nexus in Louisiana, you are required to collect sales tax from customers in the state.
Louisiana Economic Nexus Threshold: Revenue, Thresholds and Transactions
Economic nexus is another way a business can be required to collect sales tax in Louisiana. If your business has a certain amount of sales or transactions within the state, even without a physical presence, you could be considered to have an economic nexus.
In Louisiana, the economic nexus threshold is $100,000 in sales or 200 transactions in the state within a calendar year. This includes all taxable and non-taxable sales. If your business exceeds this threshold, you’ll need to collect sales tax in Louisiana.
Which services are taxable in Louisiana?
In Louisiana, many services are considered taxable. When offering these services, businesses are required to collect sales tax. Some examples of taxable services in Louisiana include:
- Repairs to tangible personal property
- Printing services
- Laundry services
- Telecommunication services
- Security services
- Cable television services
Please note that this is not an exhaustive list. For a full list of taxable services, consult the Louisiana Department of Revenue.
Louisiana Sales Tax on Products: How to Calculate What Your Business Should be Charging
Calculating sales tax in Louisiana involves multiple factors. The state rate is 4.45%, but you must also consider local parish and city rates, which can vary significantly.
Identify the correct parish and city: Determine where your customer is located. The sales tax rate can differ from one parish or city to another.
Determine the tax base: Identify the total amount that is subject to sales tax. This includes the cost of the product, plus any additional charges that are part of the sale.
Apply the correct tax rate: Multiply the tax base by the combined state and local tax rate to calculate the sales tax owed.
It’s essential to keep up-to-date with local tax rates and any changes to the law.
How much is Louisiana clothing tax?
In Louisiana, the state sales tax rate is 4.45%, but local parishes and cities can impose additional taxes. This means the total sales tax rate on clothing can range from 4.45% to 11.45%, depending on the location of the sale.
Do Louisiana sales tax holidays affect clothing tax?
Yes, Louisiana often has sales tax holidays where certain items, including clothing, are exempt from state sales tax. During these periods, customers can purchase eligible items without paying the state portion of the sales tax.
Note that during these sales tax holidays local parishes may still collect their portion of the sales tax.
Louisiana Online Sales Tax: Are SaaS and Digital Services Taxable?
In Louisiana, digital goods, including Software as a Service (SaaS), are considered taxable. This means that if you’re selling digital products or services in Louisiana, you need to collect sales tax, provided you have a sales tax nexus in the state.
SaaS Sales Tax Louisiana: Should I be charging sales tax on SaaS?
Yes, if you are selling SaaS to customers in Louisiana, you need to charge sales tax if you have a sales tax nexus in the state. And where other states base taxability based on use cases, Louisiana SaaS sales tax is applied to subscriptions of both personal and business use.
How can a business get a sales tax permit in Louisiana?
Verify your nexus and eligibility: Ensure you have a sales tax nexus in Louisiana and are required to collect sales tax.
Gather your information: Have your business details ready, including your EIN or Social Security number, business address, and business structure.
Apply online: Visit the Louisiana geauxBIZ website and follow the instructions to apply for a sales tax permit online.
Receive your permit: After your application is approved, you’ll receive your sales tax permit. Display it prominently in your place of business.
Collecting Sales Tax in Louisiana as a Business
As a business with a nexus in Louisiana, it’s your responsibility to collect sales tax from your customers and remit it to the Louisiana Department of Revenue on time.
You need to ensure that you’re charging the correct rate based on your customer’s location, including both the state and local tax rates.
Louisiana Tax Return Due Dates Explained
In Louisiana, sales tax returns are generally due on the 20th of the month following the reporting period. However, if you file your returns and make your payments electronically, you have until the 30th of the month.
What is the required frequency for sales tax returns in Louisiana?
The frequency for filing sales tax returns in Louisiana depends on the amount of sales tax you collect. If you collect:
- Less than $500 per month: You can file annually
- $500 to $5,000 per month: You must file quarterly
- More than $5,000 per month: You must file monthly
