Louisiana State Sales Tax Change, Effective July 1

The Louisiana Legislature has enacted a sales tax bill in response to the state's budget crisis. Act 1 of the 2018 Third Extraordinary Session of the Louisiana Legislature is effective Sunday, July 1, 2018. The new state sales tax rate will be 4.45%, down from the current 5% state sales tax rate. In addition, they have continued to suspend many exemptions from the sales tax, but have aligned and expanded the exemptions that will remain effective as of July 1. Now, rather than having five different tax rates related to various exemptions, we will just have two rates, zero or 4.45% for most purchases. 
 
State sales tax exemptions of note include the following, effective July 1, 2018:

• Purchases of tangible personal property for lease or rental - now fully exempt, down from the current 2%.
• Other constructions permanently attached to the ground - now fully exempt, down from the current 2%.

The one outlier for the state sales tax rate is business utilities, which will be taxed for state purposes at 2%, down from the current 4%. Act 1 also brings relief to the tax return filing process as it will eliminate the need for several of the schedules now being used when filing state sales tax returns. 
 
The .45% sales tax imposed at La. R.S. §47:321.1 and the suspension of various sales tax exemptions will sunset on June 30, 2025.