Digital products are goods that are delivered or retrieved electronically, usually via the Internet. Media streaming services and e-books usually fall into this category, but the rules may vary. Check the Louisiana Department of Revenue website for sure. For traditional business owners who sell goods or services locally, calculating sales tax is simple: all sales are taxed at the rate based on the location of the store. If you sell taxable property to Louisiana residents and you have inventory stored in the state, you likely have a connection and obligation to collect and pay taxes. To understand your unique Nexus obligations, check out our free Economic Nexus tool or contact a trusted tax advisor. Determining whether the goods or services sold by your business are taxable in Louisiana is the first step to complying with sales tax. Sales tax is a tax paid to a governing body (state or local) on the sale of certain goods and services. Louisiana first passed a state general sales tax in 1938, and since then the rate has risen to 4.45 percent. In addition to the state sales tax, there may be one or more local sales taxes, as well as one or more special county taxes, each of which can vary from 0% to 7%.
Currently, combined sales tax rates in Louisiana range from 4.45% to 11.45%, depending on the location of the sale. Once you have successfully registered to collect sales tax in Louisiana, you will need to apply the correct rate to all taxable sales, pay sales tax, file timely returns with the Louisiana Department of Revenue, and keep excellent records. Here`s what you need to know to keep everything organized and under control. In addition, any merchant who sells real estate or services to Louisiana residents must provide the Secretary of the Treasury Department with a list of such sales upon request, including the names and addresses of buyers and the amount of the sale, if both are true: you can submit directly to the LDR by visiting their website and manually entering the details of your transaction. You can also submit via Parish E-File, a central website for multiple parish/city declarations. Both are free services, but preparing Louisiana sales tax returns can be time-consuming, especially for large sellers. If you have determined that you must collect sales tax on some or all of the goods and services sold by your business, the next step is to register for a seller`s licence. This allows your business to collect sales tax on behalf of your local and state governments.
For taxable sales, the delivery and shipping costs included in the selling price are generally subject to state sales tax. Sellers can only specify shipping costs separately if the buyer can avoid them (i.e. by picking up the goods). In Louisiana, sales tax is levied on the sale of tangible property and certain services. The tax is collected from the seller and transferred to the state tax authorities. The seller acts de facto as a collector. Certain goods are exempt from sales tax under Louisiana law. Examples include most unprepared foods, prescription drugs, and utilities. We encourage businesses to review the laws and rules of the Louisiana Department of Revenue to keep abreast of taxable and exempt property, and under what conditions. Some services in Louisiana are subject to sales tax. For a detailed list of taxable services, see this PDF on the Louisiana Department of Revenue website. Mary owns and runs a bookstore in Lafayette, Louisiana.
Because books are taxable in the state of Louisiana, Mary charges her customers a flat-rate sales tax of 9% on all sales. These include the Louisiana State Sales Tax rate of 5% and the Lafayette Municipal Sales Tax rate of 4%. There are exceptions to almost every rule with sales tax, and the same goes for shipping and handling charges. Specific questions about shipping and sales tax in Louisiana should be directed directly to a tax specialist who is familiar with Louisiana`s tax laws. Louisiana is a goal-oriented state. This means that you are responsible for applying the VAT rate set by the delivery address to all taxable sales. As an entrepreneur selling taxable goods or services, you act as a representative of the State of Louisiana by collecting taxes from buyers and forwarding them to the appropriate tax authority. Louisiana State Sales and Use Tax is administered by the Louisiana Department of Revenue (LDR), as are some local taxes. However, many local jurisdictions collect and levy local sales and use taxes themselves. For more information about the local sales tax rate, contact the Louisiana Association of Tax Administrators (LATA). Services include professional services provided by lawyers, architects, landscapers, etc. The definition can be quite broad, and there can be many exceptions.
It`s best to check with the Louisiana Department of Revenue to confirm that your service is even taxable. If you collect sales tax from Louisiana residents, you`ll need to think about how to handle taxes on shipping and handling charges. Hosted store: Hosted store solutions such as Shopify and Squarespace provide built-in VAT rate determination and collection. Hosted stores provide sellers with a dashboard environment in which to manage sales tax collection in Louisiana. It is important to know the due dates associated with the deposit frequency assigned to your business by the Louisiana Department of Revenue. This way, you are prepared and can plan accordingly. Failure to file on the date indicated may result in late fines and interest charges. Economic link: A certain level of economic activity in the state. Louisiana has enacted a law requiring a distance seller to register with the state, and then collect and remit Louisiana sales tax if the distance seller meets one of the following criteria (economic thresholds): The word ”nexus” refers to a business relationship in the state.
Nexus determines the following questions for a state tax authority: Do you do business here, of what type and how much? And if you have Nexus, that means you have to levy taxes on your sales there. Fairs: You may be held responsible for collecting and paying Louisiana User Tax on orders or sales at conventions, events, or trade shows in Louisiana. Unless you have a relationship to the contrary in Louisiana, you can deduct sales tax from these sales using Form R-1029 Special Event Return. The economic link was originally scheduled to come into effect on January 1, 2019, but enforcement has been postponed to a date to be determined in 2019. Monthly Submission: On the 20th of the next month or the next business day, e.B April 20 for the month of March or May 20 for the month of April. Marketplace: Marketplaces like Amazon and Etsy offer built-in VAT rate determination and collection, usually for a fee. As with hosted stores, you can set up items from your seller dashboard and let your marketplace provider do the heavy lifting. Shipping and delivery charges listed separately are generally exempt from Louisiana state sales tax, whether delivered from a seller`s, third-party, or joint carrier`s vehicle. .