Sales Tax Nexus in Louisiana: What’s New?

Some states require businesses to reach a sales threshold before paying sales tax. Others require businesses to reach a transaction threshold. In a few states, it’s an either/or situation.

Sales tax nexus in Louisiana was previously an either/or situation. But that’s changing on August 1, which should be good news for ecommerce businesses everywhere.

Nexus: A Refresher Course

What’s nexus again?

The short and simple answer is your company’s connection to a state. Nexus rules vary by state, but one thing is constant. Ever since South Dakota v. Wayfair, a business doesn’t have to have a physical presence in a state to trigger nexus. Economic nexus is sufficient for a state to require your company to collect and pay sales tax.

States typically have thresholds that businesses need to reach before paying up. If a state has a sales threshold, your company needs to collect and pay tax once it reaches a dollar amount in sales in that state, like $100,000.

Some states have a transaction threshold, which requires companies to pay sales tax once they make a certain number of sales, such as 200.

Sales Tax Nexus in Louisiana

Sales tax nexus in Louisiana required sellers to collect and pay tax when they had either $100,000 in sales or 200 transactions. That placed a heavy tax burden on sellers with a high number of low-value sales.

For example, a business that sells inexpensive products could easily have just $1,000 in sales but more than 200 transactions.

Starting on August 1, 2023, Louisiana is doing away with the transaction threshold. The state’s legislature voted unanimously to repeal the transaction threshold.

The change in the sales tax nexus in Louisiana also affects the sales threshold for some companies. Starting in August, the threshold for marketplace facilitators changes from $100,000 in gross sales to $100,000 in retail sales. Wholesale or resale sales won’t count toward the threshold limit.

What the Change Means for You

If your company previously met Louisiana’s transaction threshold but not the sales threshold, the sales tax nexus change can mean you no longer need to collect, pay or file sales tax in the Pelican State.

Of course, if you need clarification on whether you have nexus in Louisiana or your company’s sales tax obligations with the state, we’re here for you. TaxCloud automates sales tax compliance.

We’ll make sure your business collects the right amount of sales tax during every transaction. Once Louisiana’s sales tax nexus change goes into effect, our software will automatically include the update, so you don’t have to worry about collecting tax your company doesn’t actually owe.

States update their sales tax rules and nexus requirements frequently. Our TaxGeeks stay on top of all the latest changes.

We’ll help you stay compliant no matter what the rules are. Get a sales tax compliance assessment today to see what you might owe and where.