Louisiana Amends Nexus; Adds Marketplace Facilitators

Selling into Louisiana? Allison Civello writes about Louisiana’s amended economic nexus provisions. Starting July 1, 2020, joining other states post-Wayfair, Louisiana amends nexus for sales and use tax responsibilities to include marketplace facilitators. Louisiana now defines nexus as over $100,000 in sales per year or 200+ transactions, to out-of-state sellers and marketplace facilitators.

Just over 2 years ago, June 21, 2018 to be exact, the U.S. Supreme Court issued its opinion on the case of South Dakota v. Wayfair. This decision stated that a physical presence of an office or warehouse was not necessary for a state to have the right to tax the sales of tangible property sold on websites and delivered into the state.

The original South Dakota law contained thresholds to protect smaller vendors; post-Wayfair, other states generally followed the $100,000 in-a-year sales threshold. This meant that many small vendors, even those that only sell with the help of “marketplace facilitators” (Amazon, Walmart.com, Etsy, etc.), were not required to collect and remit sales tax anywhere other than their home state unless they met the revenue thresholds.

As we all know, the only constant in life is change. Because the marketplace facilitators are not small, states began changing their initial economic nexus laws to require the facilitator to collect and report on behalf of the people using their platforms. Louisiana’s law requires that marketplace facilitators register with the state within 30 days of meeting the economic nexus threshold and to start collecting and remitting sales tax on all remote sales. The law also defines what entities are not considered marketplace facilitators in the state, such as platforms providing solely advertising services.

At this point, only four states do not have rules transferring collection, remittance and reporting responsibility to marketplace facilitators. This is good news for local companies in that the “discount of not paying sales tax” is further reduced.

Questions about nexus when selling into Louisiana or any other state? Contact us.