Louisiana Tax Nexus
Businesses with nexus in Louisiana are required to register with the Louisiana Department of Revenue and to charge, collect, and remit the appropriate tax.
Generally, a business has nexus in Louisiana when it has a physical presence there, such as a retail store, warehouse, inventory, or the regular presence of traveling salespeople or representatives. However, out-of-state sellers can also establish nexus in the ways described below.
Louisiana nexus for out-of-state sellers
If your business has ties to businesses in Louisiana, including affiliates, it may have nexus under the state’s affiliate nexus law (HB 30, Act 22). A business is a “dealer” and required to collect and remit tax if it engages in any of the following activities:
- Sells the same or substantially similar line of products as a Louisiana retailer
- Solicits business and develops and maintains a market in Louisiana through an “affiliated agent”— an agent, salesman, independent contractor, solicitor, or other representative who refers business for consideration of any kind
- Holds a substantial ownership interest, directly or through a subsidiary, in a retailer maintaining sales locations in Louisiana, or by a parent or subsidiary thereof
An out-of-state seller can also establish Louisiana nexus through referrals, including online referrals, from in-state entities. Under HB 30, Act 22, a business is a dealer and required to collect and remit tax if both the following conditions are met:
- It solicits business through an independent contractor or any other representative pursuant to an agreement with a Louisiana resident or business under which the resident or business, for a commission, referral fee, or other consideration of any kind, directly or indirectly, refers potential customers, whether by link on an internet website, an in-person oral presentation, telemarketing, or otherwise, to the seller
- The cumulative gross receipts from sales of tangible personal property to customers in this state who are referred through such an agreement exceed $50,000 during the preceding twelve months
Use tax notification requirement
Beginning July 1, 2017, noncollecting out-of-state vendors that made at least $100,000 in annual Louisiana sales must provide purchasers and the Department of Revenue with an annual statement that includes the total amount paid by the purchaser to the retailer in the preceding calendar year, and informs the consumer of their use tax obligations. The requirements are set forth in H.B. 1121.
In addition, any dealer selling property or services to Louisiana residents must, upon request, provide to the secretary of the Department of Revenue a list of such sales, containing the names and addresses of the purchasers and the amount of the sale, provided both the following are true:
- The aggregate value per sale exceeds $250
- The property is delivered into Louisiana or the beneficial use of the service occurs in Louisiana
Sellers will be reimbursed by the Department of Revenue “an amount equal to the reasonable cost of reproducing the list.”