Louisiana DOR Issues Sales Tax Guidance on Digital Goods
Louisiana’s sales tax expansion to digital products and services took effect on January 1, 2025. But many sellers were left asking: What exactly counts as a taxable digital product?
Written by Alex Lamachenka
Head of DemandGen
Published
In August, the Louisiana Department of Revenue released Business Tax Tip #29, a detailed guidance document explaining how the law applies to streaming, SaaS, apps, ebooks, and other digital transactions.
What the Guidance Covers
The Department’s guidance clarifies that sales and use tax applies to a wide range of digital products and services when sold to Louisiana customers, including:
- Digital products: streaming movies, music, ebooks, audiobooks, apps, games, newsletters, and discussion forums
- Digital codes: codes that unlock access to downloads, subscriptions, or games
- Software-as-a-Service (SaaS): charges for access to prewritten software maintained by the seller or a third party (e.g., Office 365, Zoom, Salesforce)
- Information services: subscriptions to databases, financial ratings, mailing lists, or news services
The rules also spell out exemptions — for example, certain healthcare providers, FDIC-insured financial institutions, and digital tools used directly in commercial production may be excluded from tax.
Why It Matters for Sellers
This guidance matters because it provides practical, real-world examples that answer common seller questions:
- Is an ebook taxable if sold by a university? (Yes, unless a specific exemption applies)
- Are in-app purchases taxable? (Yes, if they add digital content or features)
- Is custom software excluded? (No — custom software is no longer exempt under Louisiana law)
- Do out-of-state SaaS providers need to comply? (Yes, if sales into Louisiana exceed $100,000 annually)
By clarifying these issues, Louisiana has signaled that enforcement is coming — and sellers can no longer assume digital offerings fall outside tax rules.
Next Steps for Businesses
- Audit your catalog: Flag digital items, subscriptions, or SaaS services sold to Louisiana customers
- Update checkout and invoicing: Ensure sales tax is applied consistently across digital transactions
- Collect exemption certificates where applicable (healthcare, financial institutions, resellers)
- Monitor sourcing rules: Tax is based on the customer’s location of use or receipt, not the seller’s
Other US Sales Tax Updates
The City of Grand Junction eliminates vendor fee in 2026
Effective January 1, 2026, Colorado will eliminate the sales tax vendor fee under HB25B-1005. Grand Junction is aligning with the state by removing the vendor fee deduction, meaning sellers will remit the full amount collected, impacting cash flow but not tax rates.
Illinois eliminates state grocery sales tax starting January 1, 2026
Illinois has eliminated its 1% state sales tax on grocery items. While the state-level grocery tax is ending, local grocery taxes may still apply depending on the location of the sale.
Louisiana introduces combined state and local sales tax return
Starting with October 2025 filings (due November 20), Louisiana sellers must use a new combined return via Parish E-File to report both state and local sales tax per location.