Under a compromise plan finalized June 24, 2018, during the Louisiana Legislature’s third special legislative session, the state sales tax rate residents currently pay will be reduced. Beginning July 1, 2018, the overall rate went from 5 percent to 4.45 percent and will stay that way until June 30, 2025.
This is actually a partial tax renewal to offset the expiration of $1.4 billion in temporary taxes. In other words, without the legislative compromise the state sales tax rate would have dropped to 4 percent when a temporary 1-cent sales tax expires at the end of June.
The new tax in the amount of 0.45 percent is levied on the sale of retail goods; the use, the consumption, the distribution and the lease or rental of an item of tangible personal property; and on the sale of services.
Any dealer that charges a 5 percent state sales tax rate on or after July 1 must remit the excess collected tax to the Louisiana Department of Revenue.
Also, a state sales tax rate of 2 percent began July 1st and is to be levied on the sale, use, consumption and distribution of business utilities.
These tax changes are expected to generate about $500 million for the state’s budget, bringing “prosperity and stability,” Gov. John Bel Edwards said in late June.
The Advocate reported that the money generated by keeping a portion of the sales tax will be used for Taylor Opportunity Program for Students (TOPS) scholarships, college and university funding, social services, public safety and other state programs that had not been funded in the state’s $29 billion budget for the coming year.
| Updated Sales Tax Table and Other Important Legislation effective July 1
|The Department of Revenue has issued a new Table of Sales Tax Rates for Exemptions and Exclusions:
The New Orleans office of the Department of Revenue has resumed full customer service operations five days a week for individual and business taxpayers. Services included, hours and location information here.
Beginning in February 2018, and 4 legislative sessions later, you may be wondering how many of the bills passed impact state taxes. Here are some Acts you will want to review.
Act 1 2018 3rd ES – Sales Tax Rate Change
Reduces the rate of the temporary state sales and use tax from one penny (which has made the taxable rate five cents over the past two years) to .45 cents (which makes the new rate 4.45 cents until June 30, 2025). Act 1 also retains some exemptions and exclusions until the 2025 sunset date. Manufacturing machinery and equipment remains exempt from the state sales tax. Business utilities will continue to be taxed at 2 percent for state sales tax, rather than the entire 4.45 percent. Effective July 1, 2018
Act 527 2018 RS – Resale Certificate
Authorizes the secretary of the Department of Revenue to refuse to register or issue or may revoke a state sales tax resale certificate to new business if the business reorganization was intended to evade payment of sales and use or withholding tax. Effective July 1, 2018
Act 5 2018 2nd ES – Sales Tax Remote Dealer Definition
Provides criteria for the definition of “dealer” for purposes of the sales tax imposed on transactions involving a remote seller.
Act 250 2018 RS – Sales Tax Certain Nonprofit Subsidiaries
Provides for direct payment of state and local sales tax due on purchases by certain nonprofit subsidiaries. Effective July 1, 2018