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
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
Automobile Rental 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
Lessening of Sales Tax Exemptions
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.