US Louisiana withdraws marketplace sales tax threshold

Remote facilitating marketplaces will have to immediately register for sales tax for their out-of-state sellers 1 August 2023

Louisiana is to withdraw the threshold for e-commerce out-of-state marketplaces facilitating the sales of sellers. Above this threshold, and the facilitating marketplace must register with the state Sales and Use Tax Commission for Remote Sellers

This will come into effect from 1 August 2023.

The current Louisiana sales tax registration threshold for marketplaces is either of the following criteria:

• Gross revenue generated in Louisiana above $100,00; or
• More than 200 transactions into the state

The threshold will remain in place for remote sellers not using a marketplace.

Economic nexus on sales tax following 2028 South Dakota vs Wayfair

South Dakota vs Wayfair 2018 Supreme Court ruling launched the concept of ‘economic nexus’ meaning the act of just selling to local consumers from out of state could trigger in-state sales tax obligations for non-resident sellers. Previously, the ‘phyiscal nexus’ test was the sole test, which meant only if there were staff, retail or storage sites in state would sales tax apply.

Since the 2018 ruling, some 40 states have followed South Dakota and imposed both financial and transaction number thresholds. See table below.

US Sales Tax rates and selling thresholds