Frequently Asked Questions
Consumer Use Tax
What is Louisiana consumer use tax?
The Louisiana consumer use tax is a transactional tax that is due when a purchaser buys taxable tangible personal property or taxable services online, by catalog, or through other remote means. If the purchaser buys taxable property or services and the remote retailer does not charge Louisiana state or local sales tax, the purchaser is obligated to pay consumer use tax to the Louisiana Department of Revenue (“Department”) if the property or service is delivered to an address within Louisiana.
What purchases are subject to consumer use tax?
Consumer use tax applies to the purchases of taxable property or services from remote retailers when Louisiana state or local sales tax was not charged. Taxable purchases from remote retailers generally include purchases from catalogs, television shopping networks, firms selling over the internet, and retailers located outside of Louisiana.
Certain purchases of property and services, such as food for home consumption and prescriptions, are not subject to consumer use tax.
What is a remote retailer?
A remote retailer is a retailer who sells property or services over the internet, by catalog, or by other remote means. Remote retailers generally do not have physical presence in Louisiana but commonly solicit or sell to purchasers in Louisiana.
What is the consumer use tax rate?
For taxable purchases made on or after April 1, 2016, the consumer use tax is a combined rate of nine percent. Consumer use tax is calculated at this rate regardless of whether the actual combined state and local rate in your area is equal to, higher than, or lower than nine percent. The nine percent is allocated at five percent to the state and four percent to local jurisdictions. The Department distributes the four percent portion to local governments throughout the state.
What is the minimum purchase amount that I have to pay consumer use tax on?
Consumer use tax is due on all taxable purchases of property or services. No minimum purchase amount exists.
Who is responsible for payment of consumer use tax?
The original purchaser of the property or service is responsible for payment of the consumer use tax.
If the recipient of the merchandise is not the original purchaser (i.e., the merchandise was a gift from the purchaser and shipped to the recipient to a Louisiana address), is the recipient responsible for the consumer use tax?
No, the original purchaser of the property or service is responsible for payment of the consumer use tax. For example, if a purchaser buys a product online as a gift and instructs the remote retailer to ship the gift to the recipient’s Louisiana address, the purchaser is responsible for payment of consumer use tax. The gift recipient does not owe consumer use tax on the purchase.
How will I be notified if I owe consumer use tax?
Consumer use tax is due on all taxable purchases made when sales tax is not charged and collected by the remote dealer. To assist with compliance, Act 569 of the 2016 Regular Session of the Louisiana Legislature established notification and reporting requirements for retail sales made in Louisiana by remote retailers. Beginning 2018, remote retailers must send notifications to Louisiana purchasers by January 31 of each year. The first notification must be sent by January 31, 2018, and by January 31 each year thereafter. Remote retailers are not required to send notifications for years prior to 2017; however, purchasers are still required to pay consumer use tax on taxable purchases not reported by remote retailers.
Remote retailers are required to send annual statements to the Department by March 1 of each year. The annual statement includes the total amount paid by the purchaser to the retailer in the preceding calendar year. The remote retailer is prohibited from sending the Department any detail as to specific property or services purchased.
Since the remote retailers are required to send annual statements to the Department by March 1, will a database be set up where I can view my purchase amounts and calculate my consumer use tax?
No, the Department cannot provide information received from the remote retailers.
How will I receive my notification from the remote retailer?
You should receive your notification by first class or certified mail. If authorized by the purchaser, notifications may be sent electronically. The envelope (if by first class or certified mail) or subject line (if by electronic mail) must include the words “IMPORTANT TAX DOCUMENT ENCLOSED”.
I recently received a notification from a remote retailer stating certain purchases may be subject to Louisiana consumer use tax. What should I do?
Review your notification for accuracy. If you agree with the purchase amounts listed, calculate nine percent of the total purchase amount to determine your consumer use tax due.
For example, if a notification from Retailer A indicates you have combined taxable purchases of $1,500.00, your consumer use tax due is $135 ($1,500.00 x .09).
Your total taxable purchases are subject to consumer use tax regardless as to whether those taxable purchases were included on your notification.
For example, if you have additional taxable purchases from Retailer A in the amount of $400.00 that were not included in the notification, your total consumer use tax due is $171 [($1,500.00 + $400.00) x .09].
My total taxable purchases are $102.68. The consumer use tax is $9.24 ($102.68 x .09). Do I pay $9.00 or $9.24 to the Department?
When calculating the consumer use tax, do not round the amount of taxable purchases. For example, do not round taxable purchases of $102.68 to $103.00.
However, round the amount of consumer use tax to the nearest whole dollar. For example, if the consumer use tax is $9.24, the amount due is $9.00. If the consumer use tax is $9.68, the amount due is $10.00.
I purchased merchandise and later returned the merchandise back to the vendor. If the vendor included the cost of the returned merchandise on my notification, do I still owe consumer use tax?
No, if the merchandise was returned to the vendor and a refund or credit was received, consumer use tax is not due. Exchanged merchandise is still subject to consumer use tax.
I disagree with the purchase amounts listed on my notification from a remote retailer. What should I do?
You should review your purchase documentation, including receipts and invoices, to verify amounts listed on the notification. Contact the remote retailer directly to resolve any discrepancies. You do not need to contact the Department.
I did not receive a notification from a remote retailer; however, I made purchases subject to consumer use tax. What should I do?
You are responsible for tracking your purchases from remote retailers and paying the consumer use tax due on those taxable purchases. If you do not receive a notification, you are still required to pay consumer use tax on taxable purchases.
For example, if you did not receive a notification from Retailer B but you made taxable purchases in the amount of $600, your consumer use tax due is $54 ($600 x .09).
I have determined the correct amount of consumer use tax owed on my taxable purchases, what should I do next?
You may pay the consumer use tax by one of two methods:
The first method is to report and pay the consumer use tax on your Louisiana individual income tax return. The consumer use tax is paid in addition to any individual income tax you owe. The consumer use tax is reported on Line 24 of Form IT-540, 2017 Louisiana Resident Income Tax Return, or Line 24 of Form IT-540B, 2017 Louisiana Nonresident and Part-Year Resident Income Tax Return.
The second method is to report and pay the consumer use tax separately on Form R-1035, Louisiana Consumer Use Tax Return. Form R-1035 may be submitted any time after the taxable purchase(s) is made, but before the due date of the consumer use tax to avoid interest and penalties.
I filed my Louisiana individual income tax return. After filing the return, I received a notification from a remote retailer and I owe consumer use tax. Do I have to amend my tax return?
No, you may pay the consumer use tax due on Form R-1035, Consumer Use Tax Return, instead of amending your tax return. Alternatively, you may amend your tax return to report your consumer use tax.
I am not required to file a Louisiana individual income tax return. How do I report consumer use tax?
If you are not required to file a Louisiana individual income tax return, use Form R-1035, Louisiana Consumer Use Tax Return. This form must be mailed to the Department and payment included for the consumer use tax due.
At this time, the Department does not accept Form R-1035 or accompanying payments electronically.
I operate a business and qualify as a dealer; can I use Form R-1035, Louisiana Consumer Use Tax Return, to report consumer use tax?
No, dealers are required to be registered with the Department for sales tax purposes and can only report consumer use tax on the dealer’s state and local sales tax returns. Form R-1035 may not be used.
What is the due date for consumer use tax?
Regardless of filing method, you must pay your consumer use tax by the due date of the Louisiana individual income tax return of the year following the year you purchased taxable property or services. For taxable purchases made during 2017, you must pay the consumer use tax by May 15, 2018. Failure to pay the consumer use tax by the deadline will result in interest and penalties in addition to any consumer use tax due.
Will I receive confirmation that payment of my consumer use tax was received and processed?
If the consumer use tax was paid on a Louisiana individual income tax return, you will receive confirmation your return has been received.
I received a bill from the Department for consumer use tax that I do not agree with. What should I do?
Provide documentation, including invoices and receipts, to support your calculation of consumer use tax. Documentation should be mailed to the address listed on your bill.
For example, you purchase nontaxable property such as food for home consumption. The remote retailer sends you a notification of the purchase and reports the total amount to the Department. (Remember, the remote retailer is prohibited from sending the Department an itemized breakdown of purchases.) If the Department sends a bill for consumer use tax on this nontaxable property, you should provide a copy of the invoice from the remote retailer so the Department can consider the documentation and adjust the bill, if applicable.
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