Louisiana Sales Tax Nexus
Louisiana Risk Profile
The Trigger: $100,000 in annual retail sales.
(Note: Louisiana removed its 200-transaction threshold on August 1, 2023. It is now revenue-only. Unlike many states, marketplace-facilitated sales typically do NOT count toward this $100k threshold for the individual seller.)
Physical Nexus: Any physical presence triggers immediate liability. This includes offices, inventory (including FBA), or representatives in the state. Louisiana is also aggressive regarding remote employees and contractors.
Effective Date: July 1, 2020.
Look-back Exposure: Typically 3 years. However, Louisiana’s Remote Sellers Commission is active in cross-referencing data to find non-compliant sellers dating back to the 2020 effective date.
Danger Level: EXTREME (The Parish System)
Louisiana is second only to Colorado in complexity. The state has 64 Parishes, and many are “Home Rule,” meaning they set their own rules and can audit independently. Total tax rates can reach 12% in certain jurisdictions.
The Trap: The State vs. Local Split
While the Remote Sellers Commission centralizes some filings, the rules for when you file with the Commission versus when you must register directly with individual Parishes are complex. Additionally, the state sales tax rate increased to 5% on January 1, 2025; failing to update your tax engine can lead to immediate under-collection liabilities.
Louisiana Sales Tax Nexus Rules
Louisiana requires businesses to collect and remit sales tax if they have either physical presence or economic nexus in the state.
Economic Nexus
You have economic nexus in Louisiana if your business has:
$100,000 or more in retail sales to Louisiana customers during the current or previous calendar year.
Note: Louisiana removed the 200-transaction threshold on August 1, 2023. The threshold is now based only on sales dollars.
What counts toward the $100,000 threshold:
- Direct sales through your own website or sales channels
- Sales of tangible personal property
- Digital products and electronically delivered products
- Taxable services
What doesn’t count toward your threshold:
- Sales made through registered marketplace facilitators (like Amazon, Etsy, or eBay) that collect tax on your behalf
- Wholesale transactions with valid resale certificates
Marketplace Facilitator Law
Louisiana requires marketplace facilitators to collect and remit sales tax on behalf of third-party sellers.
If you sell through platforms like Amazon, Shopify, Walmart Marketplace, or Etsy:
- The marketplace collects tax on those sales
- Those marketplace sales don’t count toward your personal nexus threshold
- You still need to track and collect tax on sales through your own website or other channels
Marketplace facilitators must register if they exceed $100,000 in gross revenue from retail sales facilitated in Louisiana.
Physical Nexus
You have physical presence nexus in Louisiana if you have any of the following in the state:
- A retail store, office, warehouse, or other place of business
- Employees, salespeople, or representatives who work in Louisiana or solicit business there
- Inventory stored in Louisiana (including at third-party fulfillment centers)
- A distribution center or facility that stores, packages, or ships goods
Physical presence creates immediate sales tax nexus regardless of your sales volume.
Small Retailer Exception
Out-of-state businesses without physical presence in Louisiana don’t have to register for sales tax if their retail sales into Louisiana are less than $100,000 in both the current and previous calendar years.
If you qualify for this exception, you must still notify your Louisiana customers that they may owe use tax on their purchases.
When to Register
Once you meet the economic nexus threshold or establish physical presence:
- Register within 60 days
- Begin collecting tax after your registration is approved
- File returns based on your assigned filing frequency (monthly, quarterly, or annually)
Important Tax Rate Changes
Louisiana’s state sales tax rate increased from 4.45% to 5% on January 1, 2025. This rate will remain at 5% through December 31, 2029, then decrease to 4.75% on January 1, 2030.
Combined with parish and local taxes, total rates in Louisiana can exceed 10%. Some areas have combined rates of 12% or higher.
Louisiana Income Tax Nexus
Louisiana uses a single factor apportionment formula based on sales for income tax purposes.
You have income tax nexus in Louisiana if you have:
- $500,000 or more in property in Louisiana
- $500,000 or more in payroll in Louisiana
- $500,000 or more in sales in Louisiana
Note: These thresholds may be adjusted annually for inflation. Check with the Louisiana Department of Revenue for current amounts.
Frequently Asked Questions
Do I need to collect Louisiana sales tax if I only sell through Amazon?
Maybe not. If Amazon is collecting and remitting sales tax on your behalf (which they typically do), you don’t need to register separately for those marketplace sales. However, if you also sell through your own website or other channels, you’ll need to track those sales to see if they meet the $100,000 threshold.
What happens if I cross the $100,000 threshold mid-year?
You have 60 days from when you cross the threshold to register with Louisiana. You should begin collecting tax once your registration is approved.
Do exempt sales count toward the $100,000 threshold?
Yes. Louisiana counts all retail sales when determining if you’ve met the threshold, even if some of those sales are exempt from tax.
Does Louisiana have a transaction threshold?
No. Louisiana removed its 200-transaction threshold on August 1, 2023. The only threshold now is $100,000 in sales.
How do I register for Louisiana sales tax?
You can register online through Louisiana File Online (LAFile) at revenue.louisiana.gov. Remote sellers may need to register through the Louisiana Remote Sellers Commission.
What if I have employees working remotely in Louisiana?
Having remote employees in Louisiana can create both employment tax nexus (immediate) and potential income tax nexus if your Louisiana payroll exceeds certain thresholds. It may also create physical presence for sales tax purposes. Contact a tax professional to review your specific situation.
Do I need to charge different rates in different parishes?
Yes. Louisiana has 64 parishes, and each sets its own local sales tax rate. Municipalities can add additional taxes. You need to charge the correct combined rate based on where your customer is located. Sales tax software can help calculate the correct rate automatically.
What’s the penalty for not registering when required?
Louisiana charges penalties for late registration and non-compliance. Late filing penalties can be up to 5% per month (maximum 25%). Late payment penalties are 0.5% per month (maximum 10%). Interest also accrues daily on unpaid balances.
Does Louisiana offer voluntary disclosure for past tax liability?
Yes. Louisiana offers voluntary disclosure programs that may limit lookback periods and reduce penalties if you proactively address past exposure before being contacted by an auditor.
Are digital products taxable in Louisiana?
Yes. Louisiana taxes digital products and Software-as-a-Service (SaaS), including streaming services, downloadable software, digital books, and cloud-based applications.
Get Expert Help
Not sure if you have nexus in Louisiana? Need help with registration or compliance? Call us for a free consultation at 720.878.2280.
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