This article provides answers to frequently asked questions about sales tax in Louisiana. Whether you are a business owner or an individual consumer, understanding sales tax is crucial. Below are detailed explanations to help you navigate Louisiana’s sales tax regulations.
1. What Transactions Are Subject to Sales Tax?
In Louisiana, sales tax applies to several types of transactions:
- Sale of Tangible Personal Property: This includes the sale of physical items within the state.
- Use, Consumption, Distribution, or Storage of Tangible Personal Property: If you use, consume, distribute, or store tangible personal property in Louisiana, it is generally taxable.
- Lease or Rental of Tangible Personal Property: Renting or leasing tangible personal property within Louisiana is also subject to sales tax.
- Sales of Specific Services: Certain services, as defined by LA R.S. 47:301(14), are taxable. These include:
- Hotel room rentals
- Admissions to amusement, athletic, and recreational events and facilities
- Parking and storage services provided by auto hotels and parking lots
- Printing and overprinting services
- Laundry, cleaning, pressing, and dyeing services
- Cold storage and property preparation for cold storage
- Repairs to tangible personal property
- Telecommunications services
Essentially, all transactions involving tangible personal property are taxable unless specifically exempted by law. For services, only those explicitly listed are taxable.
2. What is the Sales Tax Rate in Louisiana?
Louisiana’s state sales tax rates are as follows:
| Rate Type | Rate July 2018 – December 31, 2024 | Rate as of January 1, 2025 |
|---|---|---|
| Sales Tax | 4.45% | 5%* |
| Intrastate Telecommunications, Prepaid Telephone Cards, Authorization Numbers | 3.45% | 5%* |
| Interstate Telecommunications | 2.45% | 5%* |
| Business Utilities | 2% | 2% |
| Direct Marketers (47:302(K)) | 8.45% | 9%* |
*Until 12/31/2029
As of January 1, 2025, telecommunications services, cable television, direct-to-home satellite, video programming, and satellite digital audio radio services will also be subject to an additional 5% state tax rate.
It’s important to note that local political subdivisions also levy sales and use taxes, which are added to the state rates. For local sales tax rates, you can visit the Louisiana Association of Tax Administrators website at http://www.laota.com.
While state and local sales taxes share similarities, significant differences exist, especially regarding exemptions and suspensions. Businesses should familiarize themselves with both state statutes and local ordinances relevant to their operations.
3. Are There Exemptions from Sales Tax?
Yes, Louisiana offers several exemptions and exclusions from sales tax. However, many statutory exemptions and exclusions have been partially or temporarily suspended since July 1, 1986. For detailed information on taxable rates for exemptions and exclusions, refer to Form R-1002, Table of Sales Tax Rate Exemptions on the Louisiana Department of Revenue (LDR) website.
Common consumer exemptions include:
- Food for home consumption
- Residential utilities such as electricity, natural gas, and water
- Prescription drugs
- Trade-ins on new items
4. As a Wholesaler Selling to Dealers for Resale, Do I Collect Sales Tax?
The taxability depends on the purchaser. Tax-exempt sales must be documented with proper supporting documentation based on the transaction type. Examples include:
- Louisiana resale exemption certificates for resale transactions
- Purchaser orders, invoices, and shipping details for interstate commerce sales
- Drop shipment letters for third-party sales in interstate commerce
The exemption documentation must be valid for the specific transaction.
Louisiana resale exemption certificates can be verified online at latap.revenue.louisiana.gov. Look for the “Resale Box” and follow the prompts.
For questions about other exemption certificates, call (855) 307-3893 or email [email protected].
5. Do Wholesalers Need to File Sales Tax Returns?
Yes. Louisiana-based and registered dealers must file Form R-1029 state sales tax return by the 20th of the following month, even with no sales to report or tax due, as per Revised Statute 47:306.
6. How Can Dealers Get a Refund for Sales Tax Paid on Resold Items?
Dealers purchasing items for resale should provide a valid Louisiana resale exemption certificate to the seller to avoid paying sales tax initially. If sales tax is mistakenly paid, the dealer must seek a refund from the seller. To receive a refund or credit, provide a valid Louisiana resale certificate to the selling dealer. Using a resale certificate at the time of purchase prevents being charged sales tax on resold items.
7. Is Labor Taxable?
In some cases, yes. Labor for fabricating or repairing movable property is taxable. However, labor charges for constructing or repairing immovable (real) property are not taxable.
8. What if I Purchase Property Without Paying Sales Tax?
Use tax is due on taxable sales if the vendor fails to collect sales tax. If the purchased tangible personal property is taxable, sales tax applies even if not collected by the vendor. The vendor acts as an agent for the state in collecting sales tax. If they don’t, the Department of Revenue may collect from either the vendor or the purchaser. This is supported by the court case Collector of Revenue v. J. L. Richardson Company and LAC 61:I.4301.
Refer to the Consumer Use Tax FAQ for more details.
9. How to Remit Sales Tax on Purchases Without Collected Tax?
If you are registered to collect and remit sales tax, report the purchase amount on Form R-1029, Louisiana Sales Tax Return, Line 2. Individuals can also report and remit use tax on personal purchases via the individual income tax return or by completing Form R-1035, Louisiana Consumer Use Return, available on the Department’s website.
10. Are Sales to Churches and Nonprofits Taxable?
Yes, sales to churches and nonprofit organizations are generally taxable unless specifically exempted by statute. IRS tax-exempt status for income tax does not automatically exempt them from sales tax.
11. When is the Sales Tax Return Due? What if I’m Late?
Sales tax returns are due by the 20th day of the month following the reporting period (monthly or quarterly). Late returns and payments incur interest and penalties.
Late penalties include:
- 5% penalty if return is 1 to 30 days late
- 10% penalty if return is 31 to 60 days late
- 15% penalty if return is 61 to 90 days late
- 25% penalty if return is over 90 days late
Additionally, negligence penalties under LA R.S. 47:1604.1 and examination fees may apply.
12. When Should Transactions Be Reported?
Report sales or purchases of tangible personal property or taxable services on the sales tax return for the period when the sale occurred, service was rendered, or property was imported for use, regardless of payment timing. However, LA R.S. 47:306(A)(2)(a) allows deferring reporting gross proceeds from rentals and leases until payment is received. LA R.S. 47:303(F) provides specific rules for health and physical fitness club memberships, where tax is assessed monthly on amounts paid.
13. Can I Get a Filing Deadline Extension?
Yes, a written request made on or before the return due date may grant an extension of up to 30 days, as per LA R.S. 47:306(A)(4). Interest will apply to any return filed and paid after the original deadline.
14. Does Louisiana Require Electronic Tax Payments?
Yes, in certain cases. Taxpayers with an average of $5,000 or more in payments connected to any return, report, or declaration during the prior 12-month period must remit subsequent taxes electronically.
15. Is There a Motor Vehicle Lease/Rental Purchase Exemption?
Yes, an “L” number exemption may be issued if specific criteria are met:
- Registered to collect state sales tax
- Separate account number for each location
- Motor Vehicle Commission or Used Motor Vehicle and Parts Commission license for each location
- Motor Vehicle Commission license before “L” number application
Form R-1370, Purchase of Lease or Rental Vehicles Tax Exemption Application is used for application. Each location must apply separately, even if headquarters are out of state.
16. Do I File a Return if There Are No Sales or Purchases?
Yes, failure to file a return will result in a billed assessment for that period.
17. How to Get a Sales Tax-Exempt Number for Nonprofits?
Nonprofit organizations are generally not exempt from Louisiana sales tax on purchases. Income tax exemption does not equate to sales tax exemption. Form R-20125, Sales Tax Exemptions for Nonprofit Organizations, provides more information.
18. Do Businesses with Internet Sales Collect Louisiana Sales Tax?
Internet sales are treated like catalog sales. Businesses with a physical presence in Louisiana or delivering via company vehicles into Louisiana must register and collect Louisiana sales tax. Businesses without physical presence and not meeting economic nexus are not required to register, but may voluntarily register as Direct Marketers to collect and remit a combined 8.45% state and local sales tax. See Revenue Information Bulletins 18-001, 18-002, 19-001, 20-002 for details.
Direct Marketer registration, returns, and payments are processed via Louisiana Taxpayer Access Point (LaTAP).
19. What About Bad Debts?
A sales tax refund for bad debts is issued only after the debt is deducted on a federal income tax return. The Department processes one refund claim per dealer per year. Recovered debts must be reported as new sales in the recovery period.
20. Criteria for Immovable Components?
Article 466 of the Louisiana Civil Code defines component parts of buildings or constructions as items attached that complete the building’s general type, including doors, shutters, gutters, cabinetry, plumbing, heating, cooling, and electrical systems. For constructions other than buildings, components serve its principal use. Items attached so they cannot be removed without substantial damage are also components.
Article 508 distinguishes between principal and accessory things. Accessories are movables complementing a principal movable. For movable constructions permanently attached to land, accessories are items that would be components under Article 466 if the construction were immovable.
21. How are Taxpayers Selected for Audit?
Taxpayer selection for audit is random or based on unusual reported items.
22. Why Pay Tax if the Vendor Didn’t Charge Me?
Use tax is owed on items purchased for use in Louisiana, even if the vendor didn’t collect sales tax. See the Consumer Use Tax FAQ for more information.
23. Are Rentals with an Operator Taxable?
No, rentals with an operator are considered a service and are not taxable under Louisiana sales tax law.
24. How to Get Sales Tax Information from the Department?
Submit inquiries via email to [email protected].
25. Are Newspapers Taxable?
Yes, newspapers are taxable in Louisiana.
26. Vendor Didn’t Charge Tax – Is It Their Fault?
While the vendor is responsible for collecting sales tax, the final consumer ultimately owes the tax. LA R.S. 47:303(A) states the tax is collectible from dealers, but also applies to tangible personal property imported for use in the state.
27. Consolidated Sales Tax Returns for Multiple Businesses?
Yes, if the primary and location accounts qualify. However, businesses in tax increment financing districts and traditional hotels/motels cannot file consolidated returns. These entities must report individually due to dedicated parish funds.
Businesses filing consolidated returns must list sales for each location on Schedule B and file/remit electronically. Contact (855) 307-3893 or [email protected] for more information.
28. Additional Reporting for Consolidated Returns (Starting December 2021)?
Beginning December 2021, consolidated filers must file/remit electronically and include Form R-1029B, Schedule B, itemizing all business locations, including out-of-state locations. This ensures accurate fund distribution.
Form R-1029B requires correct location ID numbers and addresses for each location for system acceptance. Use LaTAP to obtain location IDs and reporting templates.
29. Finding Location ID and Address for Form R-1029B?
Location addresses are on the sales tax registration certificate. Location ID numbers are in the upper right corner of the certificate, starting with “B.”
In LaTAP, after logging in, select the tax-specific account, then “Manage Locations,” and “View existing locations” to see a summary of locations, including ID and address. Email [email protected] for a list if you lack a LaTAP account. Register for LaTAP at www.revenue.louisiana.gov/LaTap.
30. Exemption Certificates for All Exempt Purchases?
Documentation depends on the transaction and purchaser. All exemptions require proper documentation. Louisiana does not accept other states’ exemptions or multi-state certificates. Exemptions are non-transferable. Interstate commerce sales require purchase orders, invoices, and bills of lading. Drop shipments need a drop shipment letter.
Contact (855) 307-3893 or [email protected] for more details.
31. How to Become a Quarterly Filer?
Dealers with average monthly sales tax liabilities under $500 after six returns can apply for quarterly filing.
32. Use Tax for Contractors Working with State Agencies?
If a Louisiana state or municipal agency does not provide Form R-1020 with their contract, contractors owe use tax on purchases, even for state agency projects. Purchases for state agencies do not automatically exempt contractors from use tax.
Before bidding, check if the agency will provide Form R-1020 Designation of Contractor for tax-exempt purchases of qualifying items (materials becoming property of the government agency). Non-qualifying items (tools, consumables) remain taxable. Ensure you have the contract with Form R-1020 before making tax-exempt purchases, as vendors must keep a copy for audit purposes.
