Louisiana Sales and Use Tax on Remote Sales
Frequently Asked Questions
1. What is a Remote Seller?
A Remote Seller is a seller who sells for sale at retail, use, consumption, distribution, or for
storage to be used for consumption or distribution any taxable tangible personal property,
products transferred electronically, or services for delivery within Louisiana but does not
have physical presence in Louisiana.
For more information, refer to Remote Sellers Information Bulletin 18-002: Definition of
Remote Seller and Further Guidance to Remote Sellers.
2. What if a seller has physical presence in Louisiana?
If a seller has physical presence in Louisiana, the seller is considered a dealer as defined by
LA R.S. 47:301(4) and subject to state and local collection and remittance requirements.
3. What is physical presence?
Physical presence includes, but is not limited to, the following activities in Louisiana,
whether done permanently or temporarily, directly or indirectly or through an agent or
subsidiary:
owning or operating retail spaces;
owning, leasing, maintaining, occupying, or using, an office, place of distribution, sales or
sample room, warehouse or storage place or other place of business;
having an employee, representative, agent, salesman, canvasser or solicitor operating in
Louisiana under the authority of the retailer or subsidiary; and
storage of property in third party facility.
If the seller has physical presence in Louisiana, the seller is considered a Dealer as defined
by LA R.S. 47:301(4), rather than a Remote Seller, and is subject to state and local sales tax
collection and remittance requirements.
4. Is there a minimum threshold for physical presence?
No.
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5. What is nexus (for sales tax purposes)?
Nexus can be established by either physical presence or economic nexus. A seller having
physical presence is a Dealer and subject to regular state and local sales tax collection and
remittance requirements. A seller without physical presence but having economic nexus is a
Remote Seller. Presently, Direct Marketers voluntarily register, collect and remit sales and
use tax through the Louisiana Department of Revenue (“LDR”) using the Direct Marketer
application and reporting forms (i.e., Form R-1031A, Application to File Direct Marketer Sales
Tax Return, and Form R-1031, Direct Marketer Sales Tax Returns).
6. What is the difference between a Remote Retailer, Direct Marketer, and Remote Seller?
While the terms appear synonymous, each has a separate legal meaning in Louisiana.
Remote Retailers
Remote Retailers are out of state sellers with cumulative annual gross receipts in excess of
$50,000, including those gross receipts of its affiliates, for sales delivered into Louisiana per
calendar year and must comply with the dual reporting requirements of LA R.S. 47:309.1.
For purposes of calculating annual gross receipts, the Remote Retailer and its affiliates must
include all receipts from retail sales of tangible personal property or taxable services where
the property is delivered into Louisiana or the beneficial use of the service occurs in
Louisiana. See LDR Revenue Information Bulletin 18-006 for more information.
A Remote Retailer is relieved from the reporting requirements of LA R.S. 47:309.1 if the
Remote Retailer voluntarily registers, collects, and remits on its sales for delivery into
Louisiana. This relief commences on the date of collection. The portion of the calendar year
preceding the date of collection remains subject to the reporting requirements of LA R.S.
47:309.1.
Direct Marketers
Direct Marketers are sellers without physical presence in Louisiana who may voluntarily
collect sales tax at the 8.45% rate pursuant to the LA R.S. 47:302(K).
If a Direct Marketer does not meet the economic nexus thresholds (as set forth in the Remote
Sellers section below), the Direct Marketer may continue to voluntarily collect at the 8.45%
after July 1, 2020, and remit to the LDR. If the Direct Marketer later establishes physical
presence in Louisiana, the Direct Marketer is deemed a Dealer (See Question No. 2).
Remote Sellers
Remote Sellers are required to collect and remit use tax if during the previous or current
calendar year they have gross revenue in excess of $100,000 from sales of tangible
personal property delivered into Louisiana or 200 or more separate transactions for
delivery into Louisiana.
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7. When are Remote Sellers required to register and start collecting Louisiana sales and use
tax?
Pursuant to LA R.S. 47:302 (W)(6) and LA R.S. 47:340(G)(6)(b), the Louisiana Sales and Use
Tax Commission for Remote Sellers (“Commission”) is required to enforce collections, no
later than July 1, 2020. The Commission is also required to provide notice of enforcement no
later than 30 days prior to enforcement. On and after this date, Remote Sellers satisfying the
economic thresholds set forth in LA R.S. 47:301(4)(m) will be required to register with the
Commission and collect and remit state and local sales and use tax based upon actual
applicable bases and rates.
The Commission provided the required notice of “Effective Date for Remote Seller
Registration and Collection of State and Local Sales and Use Tax at Actual Rates” by Remote
Sellers Information Bulletin 20-002 issued on May 7, 2020. The date of mandatory
registration with the Commission is July 1, 2020.
8. I am currently a Direct Marketer who meets the economic nexus threshold and currently
registered and filing the Direct Marketers’ Sales Tax Return with LDR. Will I have to re-
register with the Louisiana Sales and Use Tax Commission for Remote Sellers?
No, not if your Direct Marketer sales reported for calendar 2019 or year-to-date through
April 2020 met the $100,000 threshold. Such taxpayers will receive notification from LDR
and the Commission providing them guidance on how to complete their registration with the
Commission. LDR will provide the underlying taxpayer account information to the
Commission. However, it may be necessary for the taxpayer to verify or provide additional
information to complete the conversion of such accounts.
9. What rate of sales and use tax do Remote Sellers collect on remote sales for delivery
into Louisiana?
Prior to July 1, 2020, Remote Sellers may collect and remit sales and use tax at the combined
8.45% rate in accordance with LA R.S. 47:302(K), as provided by Remote Sellers Information
Bulletin 18-002 and LA R.S. 47:302(W)(6). Tax collected prior to July 1, 2020, is remitted to
LDR for distribution to the state and local tax collectors.
Beginning July 1, 2020, the Commission will enforce the requirement to register with the
Commission in accordance with Remote Sellers Information Bulletin 20-002. See FAQ No. 15
below for more information on the 30 and 60 day timelines that commence on July 1, 2020
for Direct Marketers and Remote Sellers who have met the economic nexus thresholds.
Direct Marketers may continue to collect and remit sales and use tax at the combined 8.45%
rate between July 1, 2020 and August 31, 2020, but are encouraged to begin collecting and
remitting state and local sales and use tax based upon actual applicable bases and rates as
soon as possible during this window.
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No later than 60 days after July 1, 2020 (September 1, 2020), Remote Sellers are required to
collect and remit state and local sales and use tax based upon actual applicable bases and
rates. At this time, Remote Sellers will remit tax collected to the Commission instead of LDR.
10. When is the Remote Sellers Tax Return due?
The Remote Sellers Tax Return and tax payments for state and local sales tax on remote sales
are due on or before the 20th of the month following the close of the calendar month of the
reporting period. The first Remote Sellers Tax Return will be for the July 2020 sales tax
period and will be due on August 20, 2020.
11. How will the Commission calculate interest and penalties on delinquent tax payments?
The Commission shall collect and remit the actual interest and penalties due to each taxing
jurisdiction based on the applicable taxing jurisdiction’s statutory interest and penalty rates.
Just as the tax, the actual interest and penalties due to each taxing jurisdiction will be
distributed directly to the taxing jurisdiction upon collection by the Commission.
12. Will Remote Sellers receive a deduction for vendor’s compensation?
Yes. Vendor’s compensation shall be allowed as a deduction against tax due. However,
vendor’s compensation is only allowed when (1) the Remote Sellers Tax Return is filed
timely on or before the 20th of the month following the month of collection and (2) all tax
shown due on the Remote Sellers Tax Return is remitted on or before the 20th of the month
following the month of collection.
13. How will the Commission distribute partial tax collections when a Remote Sellers does
not remit the entire tax balance due?
In the event a Remote Seller remits less than the full amount of sales and use tax shown due
on a return, the amount of tax actually collected will be distributed to each applicable taxing
jurisdiction on whose behalf the tax is collected. The distribution will be on a pro-rata basis
on the total amount of tax due to each jurisdiction.
Example
Remote Seller sells for delivery into Louisiana. Remote Seller collects $200 of tax from
Louisiana purchasers due to the following taxing jurisdictions:
1. State of Louisiana - $100
2. Taxing Jurisdiction within Parish A - $70
3. Taxing Jurisdiction with Parish B - $30
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Although the Remote Sellers Tax Return reflects $200 of state and local sales and use
tax due, Remote Seller only remits $50. While the outstanding $150 of tax is subject
to collection by the Commission, the Commission must distribute the $50 remitted in
accordance with LA R.S. 47:340(E)(2). The $50 shall be remitted by the Commission
to the taxing jurisdictions on a pro-rata basis, as follows:
1. State of Louisiana - $25 ($100/$200 x $50)
2. Taxing Jurisdiction within Parish A - $17.50 ($70/$200 x $50)
3. Taxing Jurisdiction within Parish B - $7.50 ($30/$200 x $50)
When the remote seller remits the remaining $150, it will be distributed based on
the same pro-rata distribution to the taxing jurisdictions. Interest and penalties shall
accrue on the outstanding $150 balance until remitted in full.
14. For purposes of calculating the economic nexus thresholds, does a remote seller include
both direct sales for delivery into Louisiana and sales made through a marketplace?
The remote seller should only consider direct sales for delivery into Louisiana to calculate
whether the economic nexus thresholds have been met. The sales made through a
marketplace may be excluded because those sales determine whether the marketplace itself
meets the economic nexus thresholds.
Example
Remote Seller sells $75,000 of tangible personal property for delivery into Louisiana
during the calendar year. These remote sales are sold directly by the Remote Seller.
Remote Seller also sells $35,000 of tangible personal property for delivery into
Louisiana during the calendar year through a marketplace.
Under these facts, the Remote Seller has not met the economic nexus threshold provisions
because the Remote Seller may exclude the remote sales made over the marketplace. This
example does not consider the transaction based economic nexus threshold.
15. What are the registration and collection timeline requirements for Remote Sellers?
Beginning on July 1, 2020, the following registration and collection timelines will apply to
Remote Sellers:
July 1, 2020
First date of mandatory registration. Remote Sellers must review their Louisiana
sourced sales transactions to determine whether the economic nexus provisions have
been met. See FAQ No. 6.
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If on July 1, 2020, the economic nexus provisions are met for either the 2019 calendar
year (January 1, 2019 – December 31, 2019) or 2020 calendar year to date (January
1, 2020 – June 30, 2020), then the Remote Seller must submit an application to the
Commission within 30 days of July 1, 2020 and must begin collecting state and local
sales and use tax based upon actual applicable bases and rates on sales for delivery
into Louisiana within 60 days of July 1, 2020.
July 31, 2020
Deadline to submit application to Commission if the Remote Seller met the economic
nexus thresholds by July 1, 2020. In general, most applications will be approved
automatically within 24-48 hours. Remote Seller may begin collecting sales and use
tax based upon actual applicable bases and rates immediately following notice of an
approved application.
September 1, 2020
Deadline to begin collecting state and local sales and use tax based upon actual
applicable bases and rates on sales for delivery into Louisiana. Tax collected during
the month must be remitted on or before the 20
th
of the following month.
Note that while the 60 day window officially ends on August 30, the Commission has
deemed that September 1, 2020 will serve as the deadline to align with the beginning
of the closest sales tax period.
If a Remote Seller has not met the economic nexus thresholds on the July 1, 2020 date, then
the applicable registration and collection timelines follow the 30 and 60 day provisions.
16. May a Remote Seller request an exception or extensions to the 30 and 60 day provisions
following July 1, 2020?
No. Louisiana law does not allow the Commission to grant an exception or extension.
17. What does “state and local sales and use tax based upon actual applicable bases and
rates” mean?
Louisiana’s sales tax system is unique in that state and local governments each collect their
own sales tax and provide for their own exclusions, exemptions, and deductions. To reduce
administrative burdens for Remote Sellers, the Commission has compiled the state and local
sales and use tax bases and rates and will provide this information on its website.
State and local sales and use tax based upon actual applicable bases and rates mean the
actual rate of tax on a taxable item delivered into Louisiana. Using jurisdictional codes
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established by the Commission, Remote Sellers will know the exact rate of state and local
sales and use tax to collect as well as if the rate is reduced in part or full because of an
exemption or exclusion.
18. Do Remote Sellers have to register with the state and each parish?
No. The Commission serves as the single entity in Louisiana to require Remote Sellers to
collect from customers and remit to the Commission. Remote Sellers do not have to register
with the state and each parish unless the Remote Seller has physical presence in Louisiana
(which, by definition, means the seller is not a Remote Seller.)
19. If a Remote Seller is registered with the state and parishes as a regular dealer, can the
Remote Seller switch to the Commission?
Yes. If the Remote Seller meets the economic nexus thresholds and does not have physical
presence in Louisiana, the Remote Seller is required to register with the Commission unless
the Remote Seller is registered directly with the state and parishes. The Remote Seller may
switch to the Commission by (1) filing an application with the Commission; (2) upon receipt
of an approved application, filing a final sales tax return with the state and parishes; and (3)
attaching a copy of the approved application form to the final sales tax returns.
The Remote Seller must remit any tax collected directly to the state and parishes while
registered with the state and parishes. Only following the receipt of an approved application
may a Remote Seller remit tax collected to the Commission.
20. I’m a Direct Marketer and do not meet the economic nexus thresholds. Can I switch my
registration to the Commission and become a Remote Seller voluntarily?
Yes. Follow the same steps outlined in FAQ No. 19.
21. I received a letter dated May 28, 2020, or an email dated June 09, 2020 notifying me that
my Direct Marketer Sales Tax Account will be converted to a Remote Seller Account with
the Commission. Why?
Based on your previous Direct Marketer Sales Tax Return, it appears that you have met the
economic nexus thresholds for the 2019 calendar year or first quarter of 2020. Your account
will be converted from the Department of Revenue’s LaTAP system to the Commission’s
filing system. While this conversion is automatic, you will need to create an account
(username and password) with the Commission’s filing system.
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As used in these FAQs, “conversion” simply means that the Direct Marketer Sales Account
has been transferred to the Commission’s filing system. “Conversion” does not meant that
the Direct Marketer must switch at the time, but that the account is available for set up
(finalizing the account by selecting a username and password) through the Commission’s
filing system.
Direct Marketers may continue to collect and remit sales and use tax at the combined 8.45%
rate between July 1, 2020 and August 31, 2020, but are encouraged to begin collecting and
remitting state and local sales and use tax based upon actual applicable bases and rates as
soon as possible during this window. See FAQ Nos. 9 and 15 for more details. In no event will
a Direct Marketer that met the economic nexus thresholds by July 1, 2020, file a Direct
Marketer Sales Tax Return for the September 2020 or later periods.
22. I am a Direct Marketer, but did not meet the economic nexus thresholds on July 1, 2020.
Will LDR or the Commission notify me when I’ve met the economic nexus thresholds?
No. The conversion process was a one-time process for existing Direct Marketers. Going
forward, Direct Marketers (and any other Remote Sellers that have not previously
registered) must monitor their transactions for delivery into Louisiana to determine when
the economic nexus thresholds have been met. Once met, the 30 and 60 day timeline start.
See FAQ No. 15 for the timelines to register and begin collection.
