Louisiana Law Says You Must Pay Tax on Online Purchases

Did you know that if a website doesn't charge you tax, you are supposed to pay it yourself when you file your taxes? It's true. The Louisiana Department of Revenue reminds shoppers that 'online' does not mean 'tax-free'. Louisiana’s Consumer Use Tax applies to transactions in which the retailer does not charge sales tax. This happens most frequently when making purchases from online and mail-order retailers, or television shopping networks that do not have physical locations in Louisiana.

When out-of-state vendors do not charge sales tax to purchases, Louisiana state law requires the shopper to report and pay the Consumer Use Tax. According to the Louisiana Department of Revenue, this tax protects Louisiana businesses from unfair competition from out-of-state retailers who don’t charge sales tax. It also helps to provide the funds that the state needs to maintain Louisiana’s schools, public safety, and roads and bridges.

The Consumer Use Tax is calculated at a rate of 8 percent, payable directly to the Department of Revenue. LDR redistributes 4 percent of the revenue to local governments.

Taxpayers can report the Consumer Use Tax annually when filing their Louisiana Individual Income Tax Return. You can also use the Consumer Use Tax Return (Form R-1035), which is available along with more information at www.revenue.louisiana.gov/ConsumerUse.