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.
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.
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:
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.
No.
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).
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 nexus 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.
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.
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.
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, 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.
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.
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. Unlike the pro-rata distribution of tax, the actual interest and penalties due to each taxing jurisdiction will be distributed directly to the taxing jurisdiction upon collection by the Commission.
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.
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:
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:
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.
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.
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.
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 20th 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.
No. Louisiana law does not allow the Commission to grant an exception or extension.
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 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.
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.)
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.
Yes. Follow the same steps outlined in FAQ No. 19.
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.
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.
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.