New Louisiana’s Economic Nexus Law

July 21, 2020

Louisiana‘s economic nexus bill is effective since 2020 1st of July. The requirements for foreign company without a physical presence are to register collected and remitted sales tax if they are over $  100,000 in sales or products that were transferred electronically or other services that has over 200 separate transactions.

What is surprising, that the first time in history Louisiana is late with this tax updates. All details for economic nexus were finalized on  May 7th, 2020- almost a year later than the majority of states.

When the economic link became legal and accomplished in 2018 the Supreme Court case of Wayfair v. South Dakota, states had “Notice And Reporting Requirements” that actually forced businesses to:

  • Inform customers about their obligations to pay use tax, and provide Louisiana with a list of your customers and how much use tax they owed (as they did not pay sales tax)
  • Just start collecting and transferring sales tax.

Louisiana’s Notice and Reporting requirements were so difficult  so they forced companies to collect and remit sales taxes. To this day Louisiana still has their Notice & Reporting requirements.

Louisiana’s Notice & Reporting requirement threshold is $50,000 in gross sales. In this case if you make $50,000 in gross sales and decide not to comply with their customer and state notification requirements (and don’t have a sales tax permit), you could face substantial penalties.

Since Louisiana still hasn‘t removed their Notice & Reporting Requirement law, we highly recommend that businesses that has $50,000 or more in gross sales requirement (from the Notice & Reporting law) OR make more than 200 separate transactions (from the Economic Nexus law) consider registering for a sales tax permit in Louisiana.

If there are any further questions please contact us.

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