Louisiana to Impose Economic Nexus Legislation on Remote Sellers in 2019

In response to the U.S. Supreme Court’s Wayfair holding, which eliminated the physical presence requirement that stood for nearly three decades, Louisiana has taken steps to capture sales tax revenue from transactions conducted by remote sellers.  The Louisiana Department of Revenue issued a bulletin indicating that remote sellers must begin collecting and remitting state sales tax beginning January 1, 2019.

The new legislation provides that remote sellers must collect Louisiana sales and use tax if during the current or previous calendar year they have (1) gross revenue of more than $100,000 derived from sales of tangible personal property, products and services delivered into the state; or (2) 200 or more transactions of products or services delivered into the state.  Remote sellers that do not meet this criterion may voluntarily register and collect sales tax.

Additionally, Louisiana legislation requires remote sellers to provide notification to purchasers that online purchases of tangible personal property and taxable services are subject to Louisiana use tax unless specifically exempt.  More importantly, this requirement is applicable even to remote sellers who do not meet the collection thresholds or to those who do not voluntarily collect and remit sales and use tax.  Remote sellers, however, may take solace in the fact that the newly created Louisiana Uniform Local Sales Tax Board has issued guidance to local sales and use tax collectors to not seek a retroactive application of Wayfair.

Remote sellers who are not currently registered with the Department of Revenue or a local sales and use tax collector can voluntarily register with the Department by completing the Form R-1031A, Application to File Direct Marketer Sales Tax Return or online by visiting the Louisiana Department of Revenue website.  The form for filing and remitting sales and use tax is Form R-1031, Direct Marketer Sales Tax Return.  A qualified tax attorney can assist with the execution of the application and potential questions or concerns that may arise in the process.

Jeanette Moffa is an attorney who concentrates on state and local taxes at Moffa, Sutton, & Donnini, P.A. She is also an adjunct professor and assistant editor to the American Bar Association’s The Sales and Use Tax Deskbook. For more information please call us at 888-966-8216.