- To what transactions is sales tax applied?
The state general sales and use tax is levied on the following transactions:
- The sale of tangible personal property in this state.
- The use, consumption, distribution, or storage for use or consumption in this state of any tangible personal property.
- The lease or rental within this state of any item or article of tangible personal property.
- The sales of certain services as defined in Revised Statute 47:301(14). Those services are the furnishing of sleeping rooms by hotels; the sale of admissions to places of amusement and to athletic and recreational events, and the furnishing of privileges of access to amusement, entertainment, athletic, or recreational facilities; the furnishing of storage or parking privileges by auto hotels and parking lots; the furnishing of printing and over printing; the furnishing of laundry, cleaning, pressing, and dyeing services; the furnishing of cold storage space and the preparation of property for such storage; the furnishing of repairs to tangible personal property; and the furnishing of intrastate telecommunications services.
All sales, use, consumption, distribution, storage for use or consumption, leases, and rentals of tangible personal property are taxable, unless an exemption or exclusion is provided by law for a particular transaction. In the case of service transactions, only the particular transactions enumerated in the law are taxable.
- What is the sales tax rate in Louisiana?
The aggregate rate of state sales tax is four percent, which consists of three point ninety seven percent (3.97%) Louisiana sales tax and point zero three percent (.03%) Louisiana Tourism Promotion District sales tax. Intrastate telecommunications and sales of prepaid telephone cards and prepaid telephone authorization numbers are taxed at three percent. Interstate telecommunication services are taxable at 3% until April 1, 2004, at which time the rate will be reduced to 2%. (Other reduced rates apply. See "exemptions", below.)
Sales and use taxes levied by political subdivisions of the state are in addition to the sales and use taxes levied by the state. Local sales tax rate information can be obtained from the web site of the Louisiana Association of Tax Administrators at http://www.laota.com.
There are many similarities between the state sales and use tax and the sales taxes levied and collected by political subdivisions of the state. However, there are also significant differences, especially in regard to exemptions and suspensions of exemptions. Businesses should fully acquaint themselves with state sales tax statutes and local ordinances that are applicable to their specific businesses. The Department of Revenue and local sales tax administrators are happy to assist with this.
- Are there any exemptions from the sales tax?
Yes. There are a number of exclusions and exemptions from the sales tax. Certain types of transactions have been excluded from the definitions in Revised Statute 47:301 making the tax inapplicable to them. Other transactions which normally would be subject to the tax under Revised Statute 47:301 have been exempted or excluded from the tax under Revised Statute 47:305. Various statutory exemptions have been partially and temporarily suspended since July 1, 1986. Among the major transactions that are subject to the various suspension rates of tax are sales of newspapers, boiler fuel, propane and other liquefied petroleum gases used for home heating and meals furnished to the staff and students of certain institutions. For the most current information relating to sales tax rates on suspended exemptions, contact the Taxpayer Services Divisions at (225) 219-7356.
Effective July 1, 2003, food for home consumption and residential utilities are exempt from state sales tax.
Non-residential electricity, natural gas, steam and water are subject to a partial exclusion phase-out, beginning July 1, 2002, at which time the rate was reduced from 4% to 3.9%. On July 1, 2003, the rate reduced to 3.8%.
Computer custom software became subject to a phased-in sales tax exclusion on July 1, 2002. For detailed information about this four-year phase-in, see Revenue Ruling No. 02-008/, on this webpage.
Numbers of consumer-related exemptions and tax preferences are not suspended, and are fully in effect. These include:
- purchases of tangible personal property to be used exclusively for lease or rental as tangible personal property,
- drugs prescribed by a physician or dentists,
- orthotic and prosthetic devices and wheelchairs and wheelchair lifts prescribed by physicians or licensed chiropractors for personal consumption or use,
- the sale or purchase of any ostomy, ileostomy, or colostomy device or any other appliance including catheters or any related item which is required as the result of any surgical procedure by which an artificial opening is created in the human body for the elimination of natural waste,
- patient aids prescribed by a physician or licensed chiropractor for home use,
- any and all medical devices used exclusively by the patient in the medical treatment of various diseases or administered exclusively to the patient by a physician, nurse, or other health care professional or health care facility in the medical treatment of various diseases under the supervision of and prescribed by a licensed physician,
- orthotic devices, prosthetic devices, prostheses and restorative materials utilized by or prescribed by dentists in connection with health care treatment or for personal consumption or use
- sales of insulin,
- the purchase or rental by private individuals of machines, parts therefor, and materials and supplies which a physician has prescribed for home renal dialysis,
- and articles traded-in on new articles.
For detailed information concerning exclusions, exemptions, and suspensions of exemption, please refer to the exemption table contained in the department's Sales Tax Law and Regulations Publication (available on our web site at or contact the Taxpayer Services Division, Taxpayer Assistance Section, at (225) 219-7356. or contact the Sales Tax Division, Taxpayer Assistance Section, at (225) 219-7356.
- I am a wholesaler, selling only to other dealers for resale. Do I have to collect and remit state sales tax?
No, you do not have to collect state sales tax when a dealer purchases items for resale and provides you with a valid Louisiana resale exemption certificate, either Form R-1064 or Form R-1055. These resale exemption certificates can be verified atwww.revenue.louisiana.gov. Click the “Resale Certificate” link to reach the Resale Certificate Validation page. Instructions are included on this page on how to determine the validity of the resale certificate.
- How can a dealer get a credit or refund of sales tax paid (advance sales tax) on purchases of items that were resold?
Dealers that purchase items for resale should provide the seller with a valid Louisiana resale exemption certificate, either Form R-1064 or Form R-1055 and not pay sales tax on these purchases. If the state sales tax has already been paid to the seller, then the dealer will be required to obtain a refund of the sales tax paid on resale purchases from the seller. If you paid state sales tax on a purchase for resale, you will need to provide a valid Louisiana resale exemption certificate, either Form R-1064 or R-1055, to the dealer who made the sale to receive a refund or credit. By providing the dealer a valid Louisiana resale exemption certificate at the time of purchase, you should not be charged state sales tax.
- Do I have to collect sales tax on charges for labor?
Under certain circumstances, labor charges are taxable. Labor to fabricate or repair movable property is taxable. Labor charges to construct or repair immovable, or real, property are not subject to sales tax.
- I made a purchase of property for my own use from a vendor who did not collect the sales or use tax from me. Is the purchase taxable? If so, which of us will the department expect to remit the tax? Can I as the purchaser ever be held liable for any tax on my purchase?
If the property you purchased is tangible personal property and is subject to sales tax as described above, then the purchase is subject to sales tax even though your vendor did not collect it. The vendor acts as an agent on behalf of the state in collecting the sales tax due. In the event the vendor does not collect the sales tax, the department may seek to collect the sales tax from the seller or the purchaser. This issue is addressed in the court case Collector of Revenue v. J. L. Richardson Company, (App. 4 Cir. 1971, 247 So.2d 151) and by the definition of dealer under LAC 61:I.4301.
- How do I remit the sales tax on a taxable purchase that I made on which the vendor did not collect the tax?
If you are registered to collect and remit sales tax, the tax should be remitted directly to the state by reporting the purchase amount on line 2 of your Louisiana sales tax return. Louisiana also has provisions in the individual income tax return by which citizens may report and remit the tax due on personal purchases on which sales tax was not collected by the vendor. The form is entitled "Consumer Use Return" and can be found on the Department’s website.
- Are sales to churches and nonprofit organizations subject to sales tax?
Yes, sales to churches and nonprofit organizations are subject to sales tax unless they are specifically exempted by statute. The designation of tax-exempt status by the IRS provides for an exemption only from income tax and in no way applies to sales tax.
- When is the sales tax return due? What happens if I am late?
The tax return is due on or before the 20th day of the month following the close of the calendar month or quarter reporting period. Interest at 1.25 percent per month and penalty at 5 percent for each 30 days, or portion thereof, of delinquency, not to exceed 25 percent, will be assessed on delinquent returns. Dealers whose state tax liabilities can be shown to average less than $500 per month can ask to be placed on a quarterly filing status.
- When must I report a transaction on my sales tax return? Can I delay reporting a sale made on credit until the sales proceeds are collected?
Transactions for the sale or purchase of tangible personal property or taxable services must be reported on the dealer's sales tax return for the month or quarter in which the sale was made, the service rendered, or the purchased property was imported into the state for use, regardless of when the proceeds of sales are collected, or when payment to the seller is required. Revised Statute 47:306(A)(2)(a) provides, however, that the reporting on sales tax returns of the gross proceeds from rentals and leases can be deferred until the dealer's sales tax return for the month or quarter in which payment is received. Revised Statute 47:303(F) provides a special rule for the remittance of the sales tax payments for memberships in health and physical fitness clubs. This statute says that the tax shall be assessed and shall be due and payable on a monthly basis computed on the amount paid each month less any actual or imputed interest or collection fees or unpaid reserve amounts not received by the health and physical fitness club.
- Can I receive an extension of the filing deadline?
Yes. If a request is made in writing on or before the due date of the return, an extension may be granted for up to 30 days from the due date of the return as provided by Revised Statute 47:306(A)(4). Interest at 1.25% of the tax per month is payable on any return filed after the normal filing deadline.
- Does the state of Louisiana require electronic payment of the tax?
Yes, under certain circumstances. Currently, If payments made in connection with the filing of any return, report, or declaration during the prior 12-month period average $15,000.00 or more, the taxpayer is required to remit the subsequent respective tax or taxes electronically or by other immediately investable funds. The Department notifies taxpayers that are required to pay electronically 90 days prior to the due date of their first electronic payment.
On January 1, 2006, it will reduce again to $10,000. And on January 1, 2008, the twelve-month average will reduce to, and remain, $5,000.
- Is there an exemption for the purchase of motor vehicles for lease or rental? If so, how do I obtain the exemption? What if my business is located out of state?
Yes, if certain criteria are met, an "L" number exemption may be issued upon approval from the Department. In order to qualify the following conditions must be met.
- The taxpayer must be registered to collect state sales tax.
- Each separate location must have its own account number.
- Each separate location must have its own license from the Motor Vehicle Commission or the Used Motor Vehicle and Parts Commission.
- The taxpayer must have a license issued by the Motor Vehicle Commission before the application for an "L" number can be approved.
The "L" number exemption is only valid for the sales tax account number to which it is issued. The exemption certificate for purchases for one business location may not be used by another location of the same business. Each location must apply for and receive its own exemption. The application is form number R-1370 and may be obtained by contacting the Special Programs Division at (225) 219-7462.
- If I do not have any sales or purchases for a certain month, do I still need to file a sales tax return?
Yes. If a return is not filed, an assessment will be billed for that period.
- How do I get a sales tax-exempt number for a non-profit organization?
Non-profit organizations are not generally exempt from sales tax on purchases in Louisiana. The tax exemption applies to income tax for the corporation.
- Do businesses with Internet sales have to collect Louisiana sales tax on their sales?
Internet sales are treated the same as catalog sales for sales tax purposes. If the business has a presence in Louisiana or delivers into Louisiana in its own trucks, it should register for and charge Louisiana sales tax on the sales it makes to Louisiana customers.
- What can I do with bad debts?
Before the Department can issue a sales tax refund on a bad debt, the debt must actually be deducted on a federal income tax return. The Department will process one refund claim per year for each dealer. If all or some portion of the debt is collected, the gross amount collected shall be reported as a new sale for the period when the recovery is made.
- What are the criteria for determining if an item is a component of an immovable?
To determine if an item is a component of an immovable, the taxpayer should ask whether or not the item being removed will cause substantial damage to the property.
- How is a taxpayer selected for audit?
A taxpayer is selected randomly or by some unusual item reported.
- Why should I have to pay taxes on items that the vendor did not charge me tax on?
If you purchase an item for use within the state of Louisiana, use tax is owned on that item. Companies that do not have nexus (i.e., no salesperson within the state, no office within the state, no property within the state, etc.) with Louisiana are not required to collect Louisiana sales tax.
- Are rentals with an operator taxable?
Rentals with an operator are not taxable because this is a service being provided. The Louisiana sales tax law does not list this as one of the taxable services.
- How can a taxpayer get sales tax information for the Department?
Contact Taxpayer Services or, contact us and submit your inquiry through our sales tax inquiry mailbox on this webpage. Division at (225) 219-7356 or write Department of Revenue. Find out when is the next available workshop.
- Are newspapers taxable?
Act 480 of the 2007 Regular Legislative Session enacted R.S. 47:301(16)(p) concerning the definition of the term "tangible personal property" to provide a sales tax exclusion for newspaper sales Effective July 1, 2008. Before the sales tax exclusion was enacted, R.S. 47:305(D)(1)(e) already exempted newspapers from the sales tax, but because the sales tax exemptions were suspended, tax was collected on newspapers. When the sales tax exclusion was enacted, the sales tax exemption under R.S. 47:305(D)(1)(e) was repealed. For more information about the suspension of the sales tax exemptions, see the Table of Sales Tax Rate Exemptions (R-1002) posted on the LDR web site.
- If a vendor does not charge us sales tax, isn't that their fault? Why don't you go to the vendor to collect the tax?
If the vendor would have charged the tax, you would have paid it to the vendor when paying the invoice. The final consumer owes the tax even if the vendor fails to collect it.
Revised Statute 303. Collection
A. Collection from dealer.
- "The tax imposed under Revised Statute 47:302 shall be collectible from persons, as hereinafer defined, engaged as dealers, as hereinafter defined."
- "On all tangible personal property imported, or caused to be imported, from other states or foreign countries, and used by him, the "dealer", as hereinafter defined, shall pay the tax imposed by this Chapter on all articles of tangible personal property so imported and used, the same as if the said articles had been sold at retail for use or consumption in the state..."
- Can a taxpayer file a consolidated sales tax return if they have more than one business located in Louisiana?
The taxpayer needs to request an Application for Consolidation from Central Registration and they will make the determination if you qualify for the consolidation.
Filers of Automobile Rental Excise Tax and all hotels and motels in Louisiana are prohibited from filing on a consolidated basis. These taxes are dedicated in whole or in part to special parish funds in the state Treasury, and therefore, each location must report individually.
- Do I have to get an exemption certificate on all my customers?
Yes, you must have a valid certificate for all of your customers.
- How can I become a quarterly filer, as I seldom have taxable transactions.
Dealers whose sales tax liabilities averages less than $500 per month after filing six returns may apply to file on a quarterly basis.
- I am in the air conditioning and heating business. We sell, service and install heating and cooling systems. We pay the sales tax on our purchases of these systems. We have a contract to install a cooling system to a state agency. Do we owe the use tax on the purchases that go into this job?
Yes. The fact that these purchases are for a state agency does not exempt you, as a contractor, from the use tax due on these purchases.