Louisiana Increases Vendor’s Compensation Rate

Effective for sales tax periods beginning on or after August 1, 2020, Louisiana has increased the rate for the vendor’s compensation state sales tax deduction. Louisiana tax law allows sellers to deduct and retain a percentage of the total amount of sales and use taxes due in order to compensate the seller for accounting for and remitting the tax to the state. The vendor’s compensation rate – previously 0.935% of the total amount of sales and use taxes due – increased to 1.05% of the total amount of sales and use taxes due for sales tax periods beginning on or after August 1, 2020. The vendor’s compensation credit is only allowed if the seller timely files the sales and use tax return and timely pays the tax due. The maximum amount of the aggregate state compensation paid to a seller is $1,500 per calendar month. The maximum is applied per seller, even if a seller operates multiple business locations within Louisiana. The calculation of vendor’s compensation is based only on the taxes levied pursuant to LA R.S.47:302, 321, 331, and LA R.S. 51:1286. No vendor’s compensation is allowed for taxes accounted for and remitted pursuant to LA R.S. 47:321.1 or any other sales tax levied by this state. This change does not apply to the Remote Seller Collection Authority or to any home rule local authorities.  (Act 27 (H.B. 11), Laws 2020; Revenue Information Bulletin No. 20-15, Louisiana Department of Revenue, July 30, 2020)

Posted on September 15, 2020