Louisiana marketplace facilitator nexus begins July 1, 2020
TAX ALERT |
On June 11, 2020, Louisiana Gov. John Bel Edwards signed Senate Bill 138, requiring marketplace facilitators to register with the state and collect and remit state and local sales taxes beginning July 1, 2020. The measure will require marketplace facilitators that exceed $100,000 in sales or have at least 200 transactions in Louisiana in the current or previous calendar year to comply with the new law. Beginning July 1, 2020, marketplace facilitators must register with the Louisiana Sales and Use Tax Commission for Remote Sellers within 30 days of meeting either the $100,000 annual sales threshold or 200-transaction threshold. Facilitators must begin collecting the state and local sales tax no later than 60 days after approval from the commission.
A marketplace facilitator is defined broadly as a person who facilitates a sale for a seller by offering for sale through any means, by a seller, tangible personal property or sales of services for delivery into Louisiana or collecting payment from the purchaser and transmitting all or part of the payment to the seller. The law excludes third-party payment processors, advertising service platforms and persons facilitating the furnishing of hotels or rental cars from the definition of marketplace facilitator.
Noteworthy, telecommunication companies may contractually agree to remit all taxes when selling through a marketplace facilitator. This exception is limited to telecommunication companies that exceed $1 billion in annual sales and is not a common provision in other state marketplace facilitator laws.
Only four states imposing a general sales tax – Florida, Kansas, Mississippi and Missouri – do not require marketplace facilitators to collect and remit tax. Florida, Kansas and Missouri have ended their regular 2020 sessions for the year, but could still address marketplace in a special session this year. A marketplace facilitator bill in Mississippi recently passed the state senate and will be considered by the house next.
The Louisiana marketplace law also provides facilitators relief from liability if the seller provides inaccurate information as well as class action protection in the event of unintentional over collection. Still, the Louisiana state and local sales tax regime remains one of the most complicated in the nation. Multiple taxing jurisdictions and rates will present challenges to remote sellers and marketplace facilitators.
The new law coincides with the enforcement of the state’s remote seller law which requires out of state vendors to collect and remit sales tax using the same thresholds as the marketplace facilitator law. Recently, Louisiana issued Wayfair collection and registration guidance for remote sellers effective July 1, 2020. Louisiana will become the forty-fourth state to enforce a Wayfair provision. For more information on nexus, please see RSM’s nexus portal.