‘Online’ doesn’t mean ‘tax-free’; Consumer use tax applies to online purchases

BATON ROUGE – The Louisiana Department of Revenue (LDR) reminds shoppers that “online” does not mean “tax-free” when making purchases during the holiday season, or any other time of year. 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. 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 vital 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.

Purchases subject to the Consumer Use Tax include:

  • Appliances
  • Books
  • Clothing
  • Computers
  • DVDs and CDs
  • Electronics
  • Furniture
  • Music and movie downloads
  • Software
  • Tobacco products

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

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