Do You Need to Get a Sales Tax Permit in Louisiana?
Quick Answer: You need to get a sales tax permit in Louisiana if you meet economic nexus requirements or are considered a “Dealer” according to the state of Louisiana. This blog also touches on Parish tax. Read on for more detailed information.
What is Sales Tax Nexus Anyway?
Your business owes sales tax in any state where it has “sales tax nexus”. In short, if you have sales tax nexus you need to collect and remit sales tax. If you don’t have sales tax nexus, you generally don’t need to get a permit.
Sales tax nexus is a legal term that means you have crossed a threshold and now have a sales tax collection responsibility in the state. Nexus can be created by having a physical presence, economic presence, or by other factors. Nexus rules vary by state and retailers have specific nexus rules based on where they have people, property or inventory.
What Should You Do Once You Determine You Have Sales Tax Nexus?
Once you determine that you have sales tax nexus in Louisiana, your next step is to register for a sales tax permit in the state. Check out our blog post on getting a sales tax permit in Louisiana for more information about that process.
Common Ways to Have Sales Tax Nexus in Louisiana
1. Economic nexus in Louisiana
If you made $100,000 of sales in Louisiana annually OR had 200 or more separate transactions, then you are required to register for, collect, and pay sales tax to the state. If you meet this threshold, it does not matter if you have a physical presence in Louisiana. Nexus has been created based on your volume of sales.
For more information, please see HLS 182ES-59.
If you need help determining which states you have crossed economic nexus thresholds, check out our Done-for-Your Sales Tax Service.
IMPORTANT REMINDER regarding Notice and Reporting requirements: It is important to note that even if you do not cross economic nexus thresholds, you may cross Louisiana’s “Notice and Reporting” requirements threshold if you make more than $50,000 in total sales. The reporting requirements are onerous and the penalties are extremely high for non compliance. You can get around Louisiana’s Notice and Reporting requirements by simply registering for a sales tax permit.
2. Being a “Dealer” creates nexus in Louisiana
Louisiana uses the term “Dealer” to describe an equivalent of physical presence nexus. If you meet any of the following criteria, you are considered a “Dealer” in Louisiana, and you will need to get a sales tax permit:
- Maintain directly, indirectly, or through a subsidiary, an office, distribution house, sales house, warehouse, or other place of business.
- Have an agent, salesperson, or solicitor operating within the taxing jurisdiction under the authority of the seller or its subsidiary, irrespective of whether such place of business, agent, salesperson or solicitor is located in such taxing jurisdiction permanently or temporarily.
- Make deliveries of tangible personal property into the taxing jurisdiction other than by a common or contract carrier.
- Your business has any person who engages in regular or systematic solicitation of a consumer market in the taxing jurisdiction by the distribution of catalogs, periodicals, advertising fliers, or other advertising, or by means of print, radio or television media, by mail, telegraphy, telephone, computer database, cable, optic, microwave, or other communication system.
- Your business has any person who leases or rents tangible personal property for a consideration, permitting the use or possession of the said property without transferring title to the buyer.
For more information, see State of Louisiana Sales Tax Statutes and Regulations, specifically, R.S 47:301(4).
If you need help determining which states you have a physical presence in, check out our Sales Tax Starter Kit service.
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Do You Need a Sales Tax Permit in Louisiana If You Only Sell on Marketplaces?
Yes. If you are an online retailer who only sells on approved marketplaces (such as Amazon, eBay, etc), you will still need a sales tax permit in Louisiana. As of the publication of this blog, Louisiana is not a marketplace collection state and the marketplace facilitators will NOT remit tax on your behalf. Businesses with no physical presence in the state conducting internet sales may choose to register for the Direct Marketer Permit. See the blog, How to Register for a Sales Tax Permit in Louisiana, for more information.
A Note About Parish Sales Tax in Louisiana
If you have physical presence nexus in Louisiana, you may also have nexus in a Parish. For those unfamiliar with the term Parish, the state of Louisiana is divided into Parishes, the equivalent of counties in other states. Parish taxes are not remitted to the state. Instead, you must register for a Parish sales tax account at the Parish Efile Page.
Businesses with no physical presence in the state conducting internet sales may register for the Direct Marketer Permit which allows them to collect and remit the combined state and local sales tax amount of 8.45% on all taxable purchases of property. If you do not opt to register for the Direct Marketer Permit, you may be required to register for, collect and pay city and Parish sales taxes directly to the Parishes.
If you are an e-commerce seller who is unsure of where you need to get a sales tax permit, check out our Done-for-You Sales Tax service.
Disclaimer: Our attorney wanted you to know that no financial, tax, legal advice or opinion is given through this post. All information provided is general in nature and may not apply to your specific situation and is intended for informational and educational purposes only. Information is provided “as is” and without warranty.