On May 19, 2020, the Louisiana Sales and Use Tax Commission for Remote Sellers issued guidance explaining that the state will enforce economic sales tax nexus on remote sellers beginning July 1, 2020. Remote sellers must submit an application with the commission for approval to collect state and local sales tax within 30 days of meeting the following economic nexus threshold requirements:
- Gross revenue for sales delivered into Louisiana that exceed $100,000 from sales of tangible personal property, products transferred electronically or services; or
- Two hundred or more separate transactions of sales of tangible personal property, products transferred electronically or services in Louisiana.
Collection of state and local sales and use tax at actual rates and bases, once notified the commission has approved the application, must occur no later than 60 days after surpassing either of the thresholds. The commission also noted that the applications, tax returns and remittances must be filed and paid electronically. The commission will serve as the single entity to collect state and local sales and use tax remittances.
Remote sellers have been allowed to collect and remit state and local sales tax on a voluntary basis using a single combined rate of 8.45%. The commission announced that it will inform those sellers of the new enforcement requirements. Remote sellers that do not meet the nexus thresholds will be able to continue to voluntarily collect.
Takeaways
More guidance is expected in the next couple of months on the state’s new software and remittance systems. Louisiana becomes the forty-fourth state to enforce economic sales tax nexus following the South Dakota v. Wayfair decision on June 21, 2018. Only two states with a general sales tax have not provided guidance or legislation for remote sellers, Florida and Missouri. Both states have adjourned their 2020 regular legislative sessions without enacting economic sales tax nexus, but may still have an opportunity to do so in a special session.
All businesses making sales of products and services into Louisiana should be aware of the new timetable for collection and remittance. Businesses meeting the gross revenue or transaction thresholds should begin preparing to comply with the remote collection and remittance law. Businesses selling into Louisiana should consult with their state and local tax advisors for more information.
