| The governor of Louisiana, John Bel Edwards, along with Louisiana State Legislature made some significant tax changes. These changes took effect on April 1, 2016, however, the full impact of some of the taxes will be felt from January 2017 going forward. According to economic experts, the change in the rate of Louisiana sales tax from the previous 4% to the current 5% will affect the sale of big ticket items. This means as a business; you need to understand the potential impact of these taxes on your company. Below are some of the critical taxation changes you should carefully watch. |  |
Louisiana Sales Tax on Food and Beverages
Any food service business that has beverage and food sales is required to file a return. Businesses included in this are coffee shops, restaurants, tearooms, cafeterias, grills, luncheonettes, mobile canteens, soda fountains, ice cream shops, and many others. Where the business makes sales between $200,000 and $499,999, the sales tax rate applicable is 0.5%. On the other hand, for sales over $500,000, the applicable rate of tax increases to 0.75% for the portion above $500,000.
The taxable foods and beverages are those manufactured or prepared and served or sold by qualified food service businesses in Orleans Parish.
The taxable foods and beverages are those manufactured or prepared and served or sold by qualified food service businesses in Orleans Parish.
Hotel Occupancy Sales Tax in Louisiana
Any business establishment in Jefferson or Orleans Parish that is engaged in the provision of lodging facilities or accommodation for transient guests is required to pay sales tax. In both Jefferson and Orleans parishes, the hotels will be required to pay 4% tax. In Orleans Parish, the businesses will be expected to pay an additional $1 per night if their hotels have between 300 to 999 rooms. In the case of hotels with a thousand rooms and above, they will be charged $2 per night. Included in this is hotel rooms that are booked via rental sites such as AirBNB.
Automobile Rental Tax
If as a business you rent automobiles in Louisiana for a duration of up to 29 days, you are supposed to collect sales tax in addition to the other applicable taxes. By definition, an automobile includes any vehicle designed to transport passengers as well as their baggage. However, the tax doesn’t apply to pickup trucks rentals.
The rate of sales tax is 3% which comprises 2.5% state tax and an additional 0.5% local tax. The only exemptions to this apply where the automobile is rented by a vehicle repair dealer or an insurance company to serve as a replacement vehicle for a customer while theirs is being repaired. Also, vehicles which are rented and the lessor furnishes the driver, are exempted from this tax.
The rate of sales tax is 3% which comprises 2.5% state tax and an additional 0.5% local tax. The only exemptions to this apply where the automobile is rented by a vehicle repair dealer or an insurance company to serve as a replacement vehicle for a customer while theirs is being repaired. Also, vehicles which are rented and the lessor furnishes the driver, are exempted from this tax.
Sales Tax Holidays
| In the past, people from Louisiana have been enjoying generous sales tax holidays. However, with the new sales tax rates in place, residents will be expected to pay approximately 2% during sales tax holidays on hunting gear, school supplies, and hurricane preparation. |  |
Lessening of Sales Tax Exemptions
Exemptions on the purchase of manufacturing equipment and business utilities were lessened and this means businesses will be expected to pay more when buying manufacturing equipment or paying utilities.
Internet Purchases
The days when shoppers from online retailers such as Amazon used to enjoy tax-free purchases are over. Under the new Louisiana sales tax, all purchases shipped to destinations within Louisiana will be subject to sales tax starting January 1, 2017. This is also applicable to Louisiana retailers who sell their merchandise online.
Before this came into effect, online buyers only kept track of their purchases over the year and then did a self-reporting during the tax filing period. The implications of this change in tax application means New Orleans shoppers will be paying anything up to 10% more when they complete their online orders.
A typical Amazon purchase will include 5% state sales tax in addition to city sales taxes which can range up to 5%. The general sales tax in Orleans Parish is 5%, but when making food and drug purchases; this drops to 4.5%.
In Jefferson Parish, the general sales tax is 4.75%, but food and drug purchases attract a much lower sales tax of 3.5%.
The reason why Amazon is collecting the sales tax is that the law requires that it does so or face the alternative ordeal of reminding customers the items they bought from them and the much they owe in sales taxes each year. With the addition of Louisiana and Colorado, Amazon now charges sales taxes in 29 states within the U.S. also to include the District of Columbia.
Before this came into effect, online buyers only kept track of their purchases over the year and then did a self-reporting during the tax filing period. The implications of this change in tax application means New Orleans shoppers will be paying anything up to 10% more when they complete their online orders.
A typical Amazon purchase will include 5% state sales tax in addition to city sales taxes which can range up to 5%. The general sales tax in Orleans Parish is 5%, but when making food and drug purchases; this drops to 4.5%.
In Jefferson Parish, the general sales tax is 4.75%, but food and drug purchases attract a much lower sales tax of 3.5%.
The reason why Amazon is collecting the sales tax is that the law requires that it does so or face the alternative ordeal of reminding customers the items they bought from them and the much they owe in sales taxes each year. With the addition of Louisiana and Colorado, Amazon now charges sales taxes in 29 states within the U.S. also to include the District of Columbia.
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