What Services Are Taxable in Louisiana?

Louisiana’s sales tax framework presents a distinct approach to taxing services. Services are generally exempt unless specifically identified as taxable by law. Businesses providing services in Louisiana must understand the state’s statutes to ensure compliance with sales tax obligations.

Understanding Service Taxability in Louisiana

In Louisiana, services are not subject to sales tax unless explicitly enumerated as taxable by state law. This contrasts with tangible personal property, which is generally taxable unless specifically exempted. Louisiana Revised Statutes Title 47, Chapter 2, Part I, defines the specific services subject to sales tax. Service providers must verify the tax status of their offerings against these regulations.

Common Taxable Services

Louisiana law specifies several categories of services subject to sales tax. As of January 1, 2025, Louisiana has expanded the number of taxable services.

Repair and maintenance services for tangible personal property, including digital products.
Laundry, cleaning, pressing, alteration, and dyeing services.
Furnishing of sleeping rooms by hotels, motels, and similar establishments to transient guests.
Amusement and recreation services, such as admission fees to events or athletic facilities.
Telecommunication services, including intrastate and interstate calls. An additional state sales tax of 5% is imposed on telecommunications, cable television, direct-to-home satellite, video programming, and satellite digital audio radio services. This 5% tax replaces any local sales and use taxes on these specific services.
Parking services and the furnishing of cold storage space.
Printing and copying services.
Prewritten computer software access services.
Information services.

Exempt Services

Many services in Louisiana are generally not subject to sales tax because they are not specifically enumerated as taxable. If a service does not fall into a specifically listed taxable category, it is typically exempt.

Professional services, such as those provided by legal, accounting, medical, architectural, and engineering professionals, are generally exempt. Educational services, including tuition fees for schools and colleges, are also typically not subject to sales tax. Personal services, like haircuts, massages, or other grooming services, are usually exempt unless part of a larger taxable transaction. Insurance services and various financial services, including banking and investment advisory services, generally do not incur sales tax.

Sales Tax Collection and Remittance for Services

Once a service provider determines that their services are taxable in Louisiana, they must adhere to specific procedures for collecting and remitting sales tax. The first step involves registering with the Louisiana Department of Revenue (LDR) to obtain a sales tax account. This registration can be completed online through the LDR’s website, such as the Louisiana Taxpayer Access Point (LaTAP) portal.

Service providers are required to calculate the state sales tax amount based on the current state rate, which is 5% as of January 1, 2025. It is important to separately state the sales tax on invoices or receipts provided to customers. This transparency helps customers understand the components of their total charge.

Filing sales tax returns and remitting collected taxes to the LDR occurs on a regular schedule. The frequency of filing, whether monthly, quarterly, or annually, depends on the volume of sales tax collected. For example, businesses with tax liabilities exceeding $500 per month typically file monthly, while those with smaller liabilities may file quarterly or annually. Sales tax returns and payments are generally due on or before the 20th day of the month following the reporting period. Remittance methods include online payments through LaTAP, ACH debit or credit, or other electronic funds transfers.

Navigating Local Sales Taxes

A significant aspect of sales tax compliance in Louisiana involves understanding and navigating the complex system of local sales taxes. In addition to the statewide sales tax, parishes, municipalities, and special districts have the authority to levy their own sales taxes. These local taxes apply to the same base of taxable services as the state sales tax, but their rates can vary considerably across different jurisdictions.

Louisiana operates under a destination-based sales tax principle for services. This means that the sales tax rate to be applied is generally determined by the location where the benefit of the service is received or consumed by the customer, rather than the service provider’s location. This can present challenges, especially for businesses providing services across multiple parishes or cities, as they must accurately identify the correct local jurisdiction and its corresponding tax rate for each transaction.

To assist in determining accurate local rates, businesses can utilize resources provided by the Louisiana Department of Revenue or parish tax collector websites. Some resources offer lookup tools or databases that help identify the combined state and local sales tax rates for specific addresses. Service providers with a standard license type must report, collect, and remit sales tax in each individual parish where they conduct business. However, remote sellers and direct marketers may have simplified filing processes, often remitting on a single form.