If you have dealt with multi-state tax before, you know how varied and complex some state legislation can be. One state with a particularly complicated sales tax system is the lively state of Louisiana. In this blog article, we discuss what makes Louisiana’s tax climate unique, as well as a recent lawsuit they faced because of it.
The Complexity Of The Louisiana Sales Tax System
In most states, your only requirement is to collect and remit sales tax based on the rate in the states you do business in. If you have sales tax compliance in Louisiana, however, not only do you have to collect and remit tax to the state, but you are also required to separately collect and remit sales tax in each individual parish (or county) that you do business in. There are 64 parishes in Louisiana, so it can become complex and time-consuming very quickly, especially for small businesses and businesses that already have multi-state tax obligations.
Louisiana also has the highest combined state and local sales tax rate in the United States, at 9.55%. The next two highest are Tennessee at 9.547% and Arkansas at 9.48%. Sometimes, particularly for small businesses, the time and money that extra sales tax compliances take can outweigh the benefits of selling products in the state.
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