Consumer Use Tax

Know the Facts about Consumer Use Tax

If you purchased goods from out-of-state companies for use in Louisiana and were not properly charged Louisiana sales tax, Louisiana Revised Statute 47:302(K) requires you to pay a Consumer Use Tax directly to the Louisiana Department of Revenue.

Louisiana, like other states that impose a sales tax, also taxes the use of property that is brought into the state untaxed when purchased. This tax, referred to as the "use" tax, was enacted in 1934 and complements the sales tax by subjecting to tax merchandise purchased from an out-of-state source that does not collect the state's sales tax. The purpose of the use tax is not only to raise revenue, but also to prevent retailers located out-of-state from having an unfair competitive advantage against in-state retailers who have to charge the sales tax.

Individuals in Louisiana are responsible for paying use tax on an out-of-state purchase when the item purchased is subject to the Louisiana sales tax and the retailer making the sale does not collect sales tax on the sale. Items that are subject to sales tax include computers, other electronic equipment, canned software, books, audio, video tapes, compact discs, records, clothing, appliances, furniture, other home furnishings, sporting goods, jewelry, etc. Out-of-state retailers include mail-order catalogs, television shopping networks, firms selling over the internet, retailers located outside Louisiana, etc.

The Louisiana use tax is currently calculated at the rate of 8.45%. The rate decreased from 9% to 8.45% effective July 1, 2018. This 8.45% rate, which includes 4% to be distributed by the Department of Revenue to local governments, is in lieu of the actual local rate in effect in your area, and is payable regardless of whether the actual combined state and local rate in your area is equal to, higher than, or lower than 8.45%.

Consumer Use Tax can be reported and paid annually when filing your Louisiana Individual Income Tax Return. Refer to the instructions in the booklet for reporting and paying the total Consumer Use Tax owed.

In lieu of paying your Consumer Use Tax annually, you may report your Consumer Use Tax on the Consumer Use Tax return (Form R-1035). The return is due by the 20th of the month following the month in which the merchandise is purchased. Example: Purchases made in January - the tax is due to be paid by February 20th. A return should be completed for each month in which merchandise is purchased.