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Louisiana Sales Tax 2022 for Businesses: A Complete Guide

“The sales tax for businesses in Louisiana is 4.45%”

What Does The Louisiana Sales Tax For Businesses Mean?

When you offer taxable goods or services, you function as an agent for the state of Louisiana, collecting tax from customers and remitting it to the proper tax authorities. Louisiana’s state sales and use tax, as well as various local taxes, are administered by the Louisiana Department of Revenue (LDR). Many municipal governments, on the other hand, charge and collect local sales and use taxes. The Louisiana Association of Tax Administrators can provide information on local sales tax rates (LATA).

The state of Louisiana owns any sales tax received from customers, not you. It is your job to keep track of the taxes you collect in order to comply with state and municipal regulations. If you don’t, you may be fined and assessed interest.

Read More: Texas Sales Tax 2022 for Businesses: A Complete Guide

How Much Is The Louisiana Sales Tax For Businesses?

Louisiana has a 4.45 percent state sales tax and allows local governments to levy a local choice sales tax of up to 7%. There are 263 local tax jurisdictions in the state, collecting an average of 5.076 percent in local taxes.

The city of Sterlington has the highest sales tax rate in Louisiana, at 12.95 percent when combined with the state sales tax.

Louisiana Sales Tax Threshold Limit
4.45% $100,000 economic sales threshold limit and 200 transaction threshold limit

Do You Need To Collect Louisiana Sales Tax For Your Ecommerce Business?

The sale of tangible products and some services in Louisiana is subject to sales tax. The vendor is responsible for collecting the tax and remitting it to the state tax authorities. De facto, the vendor is a collector.

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Start by completing the following three questions to see if you need to collect sales tax in Louisiana:

  • Do you have a connection to Louisiana?
  • Are you selling Louisiana residents’ taxed products or services?
  • Do your customers have to pay sales tax?

If you answered yes to all three questions, you must register with the state tax authorities, collect the correct amount of sales tax per transaction, file returns, and remit to the state.

Therefore, this is what the Louisiana sales tax for businesses is all about. Now the question arises: what types of goods and services are taxable under Louisiana sales tax? Let’s see.

What Types Of Goods And Services Are Taxable Under Louisiana Sales Tax?

The first step in sales tax compliance is determining if the products or services your company sells are taxable in Louisiana.

Traditional Goods & Services

Physical property, such as furniture, home appliances, and automobiles, are all subject to sales tax in Louisiana.

Groceries, prescription drugs, and gasoline are all tax-free purchases. Sales tax applies to several services in Louisiana as well.

Digital Goods & Services

A digital good or service is anything that is provided electronically, such as music purchased on iTunes or a movie purchased on Amazon.

Businesses in Louisiana are required to collect sales tax on the sale of digital items. The following table shows the taxability of various goods and services.

Goods or Services Taxability
Clothing 4.45%
Groceries Exempt
Prepared Foods 4.45%
Prescription Drugs 4.45%
OTC Drugs 4.45%

Therefore, if you are dealing in any of these goods or services, you are subject to pay sales tax in Louisiana accordingly. Now let’s move on to see the tax collection and tax filing procedure in Louisiana.

Tax Collection

Once you receive your seller’s permit and begin your business, you will need to figure out how much sales tax to charge different clients. It’s critical for business owners to collect the correct sales tax rate to avoid fines and costly audits.

When calculating sales tax, you must account for the following types of purchases:

  • Store Sales-  For business owners selling goods or services on-site, the process of calculating sales tax is straightforward: the store’s location determines the rate of taxation.
  • In-State Sales-  Louisiana operates under a destination-based sales tax regime. This means that long-distance sales in Louisiana are taxed based on the buyer’s address. Sale taxes collected by the state, counties, and cities are subject to this regulation.
  • Out of state Sales-  Only businesses with nexus in other states are required to pay sales tax on out-of-state sales. The term “nexus” refers to a company’s physical presence in another state.

Tax Filing

You’re ready to file your sales tax return now that you’ve applied for your Louisiana seller’s permit and learned how to charge the correct amount of sales tax to all of your customers. You avoid penalties and fines and make sure to meet all filing dates.

Businesses in Louisiana are required to file sales tax forms and make sales tax payments online.

How often do you need to file the sales tax return in Louisiana?

The amount of sales tax your company earns determines how often you must file.

  • Quarterly filing- If your firm collects less than $500 in sales tax every month, you should choose to file quarterly returns.
  • Monthly filing- If your firm collects more than $500 in sales tax every month, you need to file monthly returns.

What If You Fail To File The Louisiana Sales Tax Return Before The Due Date?

Filing Deadlines

The deadline for all Louisiana sales tax returns is the 20th day of the month unless it is a weekend or federal holiday, in which case it is postponed to the next business day.

Penalty

Louisiana assesses a late filing penalty of 5% every month or partial month, up to a maximum of 25% of the tax stated on the tax return.

If the return has previously been filed but not paid in full, Louisiana assesses a late payment penalty of 0.5 percent each month up to 25 percent of the outstanding tax.

For any unpaid tax or penalty, the state charges a compounded interest rate of 4.5 percent per year or 0.35 percent every month or half month.

Need Assistance With Louisiana Sales Tax

We assist internet entrepreneurs with their tax and accounting difficulties at Freecashflow.io. In addition to multibillion-dollar organizations, we’ve worked with Warner Brothers, Ernst & Young, and Paramount Pictures. We can help you with your accounting and tax needs. If you have any questions or concerns, please contact us.

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