As of July 1, certain online merchants are now paying local parish sales taxes instead of the flat-rate online sales tax previously enacted by the state and later divided among the parishes.
Previously, out-of-state online merchants paid an 8.45% sales tax, usually charged to the customer upon purchase. Of that, the state kept 4.45% (the same as the Louisiana sales tax rate) and then divvied up the remaining 4% among the parishes through a population-based formula, according to East Baton Rouge Parish Revenue Manager Tiffani Delapasse.
Now businesses that have at least 200 orders or make $100,000-worth of sales in Louisiana will pay the sales tax amount of the parish in which the purchase is made. For online purchases from qualifying sellers in East Baton Rouge, sales tax is now 9.95%, meaning the parish could receive more from online sales than before.
Although the legislation for online sales taxes has been in place since 2018, Delapasse says it took two years for the state’s Sales and Use Tax Commission for Remote Sellers to enact the electronic program that taxes merchants based on the location of the purchase, which is why the flat rate was used temporarily.
Wednesday was the deadline for the July online tax filings. However, Delapasse and East Baton Rouge Financial Director Linda Hunt don’t expect to know until early-to-mid September how much money will come to the parish through the new system.
“There are sectors going up, going down,” Delapasse says. “It varies month-to-month.”
