Louisiana State Tax Updates

November 4, 2024

Authored by: Emilia Jarrin and Katie Nguyen, CPA

On September 26, 2024, The Louisiana Department of Revenue issued its Notice to Taxpayers related to promotional items provided by casinos to customers on a discounted and/or complimentary basis, including (but not limited to) rooms, meals, parking/valet, and VIP experiences. Pursuant to the Notice, Casinos are obligated to collect and remit sales tax on the discounted/promotional price actually paid by the customer. If the customer is provided a promotional item free of charge, no sales tax is due from the customer.

The Notice does not address the use tax that may be due by the casino on promotional items given to customers and/or sold at a discounted price. Casinos may be obligated to self-assess use tax in certain circumstances on promotional items that are sold on a discounted basis and/or given away.

If you have questions about sales and use tax, please reach out to a member of the Withum SALT Team.

June 14, 2024

Authored by: Bonnie Susmano, JD, MBA and Emilia Jarrin

The Louisiana Board of Appeals (“Board”) deemed music streaming services provided by Apple Music are not subject to sales tax in New Orleans (“City) under the Internet Tax Freedom Act (“ITFA”). Apple argued, and the Board agreed, that imposing a sales tax on internet music streaming services while not imposing a similar tax on satellite music streaming services was impermissibly discriminatory under ITFA.

If you have questions about how states tax digital goods and services, please reach out to a member of the Withum SALT Team.

August 22, 2023

Authored by: Jessie Racioppi and Bonnie Susmano, JD, MBA

On August 10, the Louisiana Sales and Use Tax Commission released a draft information bulletin for remote sellers. The draft provides information for businesses making direct sales to customers and businesses making sales through marketplace facilitators. The draft also defines who the Commission considers a marketplace facilitator.

The draft bulletin also provides guidance on the related collection and remittance procedures and specific responsibilities for merchants.

If you have questions about state sales taxes, please reach out to a member of the Withum SALT Team.

June 8, 2023

Authored by: Jessie Racioppi and Bonnie Susmano, JD, MBA

Effective May 30, 2023, Louisiana Governor Edwards enacted a law automatically extending the deadline to file sales tax returns and pay sales tax in specific situations. Taxpayers will receive an automatic:

The state will not impose any interest or penalties during the automatic extension periods.

If you have questions on this topic, please reach out to a member of the Withum SALT Team.

June 10, 2022

Louisiana will continue to have one of the more complicated sales tax systems after the state Legislature failed to enact House Bill 681, which aimed to establish a centralized sales tax administration over all the parishes. The centralization of the sale tax administrative process would make life much easier for retailers to comply with the state and erase the undue burdens of the state’s severe localized sales tax regime of 64 parishes.

While there have been some minor attempts to introduce more streamlined efforts, an amendment to the constitution is necessary to enact centralization over the sales tax administrative process. That said, Louisiana lawmakers did enact other sales tax laws that can benefit taxpayers, which include the following:

December 9, 2021

Louisiana’s Department of Revenue announced that it will delay implementation of some provisions in its Fresh Start Worker Classification Program (“Fresh Start Program”), which was originally set to begin on January 1, 2022. The Fresh Start Program allows employers who have misclassified employees as independent contractors to voluntarily disclose the misclassification error to the Department and prospectively reclassify these workers as employees. The benefit for participating in the Fresh Start Program is that the Department will not assess withholding tax, unemployment tax, interest and penalties for prior periods where workers were improperly treated as independent contractors. The Louisiana Workforce Commission adopted an Emergency Rule, effective November 8, 2021, to delay the enactment of specific provisions that provide relief associated with the Fresh Start Program. As such, the Fresh Start Program will be delayed while the Emergency Rule is in effect.

Contact a Withum State and Local Tax professional if you have questions about whether your business may benefit from participating in the Fresh Start Program once the Program commences.

November 19, 2021

The Louisiana Department of Revenue (DOR) issued Louisiana Revenue Information Bulletin No. 21-028 requiring new electronic filing and payment for sales tax consolidated filers, which are necessary for DOR to comply with 2021 legislation to create the Hurricane and Storm Damage Risk Reduction System Repayment Fund (“Fund”).

Beginning with the December 2021 sales tax period, consolidated filers will be required to file returns and remit taxes electronically as well as complete a new schedule when filing returns. Additionally, the bulletin also requires consolidated filers to report sales on a parish-by-parish basis to ensure accurate Fund distribution and tracking for sales taxes attributable to the five impacted parishes (St. Bernard, St. Charles, Jefferson, Orleans, and Plaquemines). Additionally, Schedule B is required to be completed and submitted with consolidated sales tax return.

July 2, 2021

Louisiana has now added participants in work-release programs to the Louisiana work opportunity tax credit. The credit for work-release participants is effective retroactive to January 2, 2021. The credit’s purpose is to reduce barriers to employment for individuals participating in work-release programs. The non-refundable credit is equal to 5% of the total wages paid to eligible employees in an eligible job for 12 consecutive months, subject to a $2,500 per-employee cap. Any unused credit may be carried forward for five years and the credit program will sunset on June 30, 2027.

Louisiana’s legislation also extended the 5% benefit rate for qualified wages for the earned income tax credit to December 31, 2030. The credit benefit rate was previously subject to a scheduled drop to 3.5% of qualified wages after December 31, 2025. As such, this scheduled reduction has now been postponed until 2031.

As of June 23, 2021, Louisiana has enacted a Youth Jobs Tax Program credit and an Apprenticeship Tax credit. The Youth Tax credit provides a non-refundable tax credit that is allowed against income and corporation franchise tax for a business that hires one or more eligible youth on or after July 1, 2021. The credit requires the eligible employee to work at least three consecutive months in a full-time or part-time position. The potential credit is $1,250 per full-time hire and $750 per part-time hire. The total amount of credits claimed by all taxpayers is limited to $5 million per year and the Department will establish a first come first served system for allocating credits. Any unused tax credits may be carried forward up to five years. The Youth Jobs Tax credit will sunset on December 31, 2025.

The Apprenticeship Tax Credit is also a non-refundable tax credit (effective Jan 1, 2022) taken against the Louisiana income tax or corporation franchise tax for the employment of eligible apprentices. Each eligible apprentice that is employed for a minimum of 250 hours during the taxable period generates a $1.25 per hour tax credit up to $1,250 per eligible apprentice. The total amount of tax credits claimed by all taxpayers is limited to $2.5 million per year and the Department will establish a first come first served system for allocating credits. Any unused credits may be carried forward up to five years. This credit will sunset on December 31, 2028.

March 23, 2021

The Louisiana Department of Revenue is granting automatic filing and payment extensions to taxpayers whose homes, principal places of business, critical tax records, or paid tax preparers are located in the parishes declared federal disaster areas following the severe winter storm that occurred February 11, 2021, to February 19, 2021, and in Texas counties that are designated by FEMA as eligible for both individual and public assistance. The declared disaster area for Louisiana includes all 64 parishes. For individual income, corporation income, franchise, fiduciary income, partnership, and partnership composite tax returns and payments with original or extended due dates on or after February 11, 2021, and before June 14, 2021, the automatic extended due date is June 15, 2021. For purposes of income and franchise tax only, this extension will apply to all taxpayers and paid tax preparers in Louisiana and Texas regardless of parish or county, respectively. Tax returns and payments for the 2020 income tax year and 2021 franchise tax year are extended to June 15, 2021. For sales, severance, and excise tax returns and payments with original or extended due dates on or after February 11, 2021, and on or before February 28, 2021, the automatic extended due date is March 31, 2021. (Louisiana Revenue Information Bulletin No. 21-007, 03/18/2021.)

March 21, 2020

Governor John Bel Edwards declared a statewide public health emergency as a result of the imminent threat posed to Louisiana citizens due to COVID-19. The Department of Revenue (“Department”) issued guidance with respect to the filing and payment extension relief for February 2020 sales tax taxes due on March 20, 2020, and to share other important updates. For purposes of the guidance issued by the Department, February 2020 sales tax includes the following taxes: General Sales and Use Tax, Direct Marketer Sales Tax, Automobile Rental Excise Tax, Hotel Occupancy Tax, Ernest N. Morial New Orleans Exhibition Hall Authority Food and Beverage Tax, and Ernest N. Morial New Orleans Exhibition Hall Authority Tour and Service Contractor Taxes.

The filing and payment deadline for the February 2020 sales tax return deadline is extended to May 20, 2020. This is an automatic extension and no extension request is necessary. The Department will waive delinquency penalties and compromise interest associated with delinquent sales tax remittances as long as the return and payment are received by the extended due date of May 20, 2020. While taxpayers cannot utilize the Parish E-File or Sales Tax Online filing systems to take advantage of this filing and payment extension relief, taxpayers can file sales tax returns and payments via LaTAP or by paper filing. All electronic filing and payment mandates with respect to sales tax are temporarily suspended. No penalties will be assessed for a taxpayer’s failure to file a sales tax return electronically or remit sales tax by electronic funds transfer.

The February 2020 excise tax returns and payments for (1) Wine Shipped Direct to Consumers and (2) Louisiana State and Parish and Municipal Beer Tax are due on March 20, 2020. The filing and payment deadline for these February 2020 excise tax periods is extended to May 20, 2020. This is an automatic extension and no extension request is necessary. The Department will waive delinquency penalties and compromise interest associated with delinquent excise tax remittances as long as the return and payment are received by the extended due date of May 20, 2020.

Effective March 16, 2020, all tax assessments (i.e. income, sales, and excise tax) issued by the Department are suspended until April 13, 2020. This suspension is applicable to the time delay for a taxpayer’s petition to appeal for redetermination of an assessment with the Louisiana Board of Tax Appeals and for the time delays for appeals in Louisiana courts filed by taxpayers and the Department. The Department will grant an automatic extension for any outstanding audit or litigation matter, including but not limited to, proposed assessments, protests, requests for information, discovery requests, and continuances. Except for system-generated assessments on self-assessed returns, the Department will take no action in issuing formal assessments on audited accounts until at least April 13, 2020.

The Department temporarily suspended collection activity on delinquent taxpayer accounts. However, delinquency interest and penalties will continue to accrue on unpaid balances. Learn more here.

February 2020

The Louisiana Department of Revenue recently issued guidance regarding the new corporate income tax regulations for pass-through entities electing to be taxed as a C corporation. The Department has begun accepting elections as of February 1, 2020, for taxable years beginning on or after January 1, 2019.^[1] Elections can be made in the prior taxable year that the election was in effect. The election can also be made on or prior to the 15th day of the fourth month after the close of the taxable year the election is initially in effect. Pass-through entities electing to be taxed as a C corporation must meet specific requirements. On election day, members with more than a 50% interest in the entity, based upon capital accounts, must do the following:

Subsequently, the entity must electronically file Louisiana Form CIFT-620, Corporation Income Tax and Franchise Tax Return, for the taxable year in which the election was made as well as all tax years thereafter until the election is terminated.

[1] U.S. Department of Revenue Policy Services Division. Internal Revenue Service. (2020). Election of Pass-Through Entities (LAC 61.I.1001). Retrieved from https://revenue.louisiana.gov/LawsPolicies/NOI%20LAC%2061.I.1001%20(Proposed%20Regulation).pdf.

Disclaimer: Please note this is the information that is readily available at this time, it is subject to change so please consult your Withum tax advisor.