Louisiana to enforce economic nexus by July 1, 2020
Update 9.19.2019: Remote sellers will be required to file and remit sales tax electronically once economic nexus takes effect on July 1, 2020, according to the Louisiana Sales and Use Tax Commission for Remote Sellers.
A measure granting Louisiana the authority to enforce economic nexus has been enacted.
Louisiana was one of the first states to adopt sales tax economic nexus, which it did prior to the United States Supreme Court ruling in South Dakota v. Wayfair, Inc. (June 21, 2018). At the time, states lacked the authority to tax remote sales based solely on a remote seller’s economic activity in the state, and Louisiana didn’t enforce economic nexus.
After the Supreme Court ruling in Wayfair authorized states to tax remote sales, the Louisiana Department of Revenue announced it would enforce economic nexus starting January 1, 2019. It later pushed back enforcement until “a date to be determined in 2019.”
We’re still waiting for an exact enforcement date. However, the enactment of House Bill 547 promises that it will be no later “than July 1, 2020.” The Louisiana Sales and Use Tax Commission for Remote Sellers will notify remote sellers of their impending sales and use tax collection obligation at least 30 days prior to the date of enforcement.
Once economic nexus takes effect, a remote seller must register with the state no later than 30 days after it has either:
- More than $100,000 in gross revenue from sales of tangible personal property, products transferred electronically, or services delivered into Louisiana in the current or previous calendar year; or
- At least 200 separate transactions of tangible personal property, products transferred electronically, or services sold for delivery into Louisiana in the current or previous calendar year.
Once registered with the tax authorities, a remote seller with economic nexus must commence sales tax collection and remittance no later than 60 days after surpassing either of the above criteria.
The first iteration of HB 547 included a provision requiring marketplace facilitators to collect and remit the tax due on all sales made through the marketplace. The enacted bill makes no mention of marketplace facilitators.