Yes, as of January 1, 2025, software-as-a-service (SaaS) is taxable in Louisiana with the passage of House Bill 8.
| SaaS | |
|---|---|
| Digital Goods | |
| Confused? | Talk to us -> |
| Sales | $100,000 |
|---|---|
| Transactions | N/A |
| Physical? |
| Louisiana | 5.00% |
|---|---|
| Average Total Rate | 10.13% |
| Local Rates Apply |
In early December 2024, Louisiana’s legislature passed a package of new bills that made several changes to Louisiana’s sales tax rules. House Bill 8 (HB8) made SaaS and other digital goods and services taxable at the state level. House Bill 10 (HB10) raised the state’s sales tax rate to 5% (from 4.45%).
On top of this, parishes and other local jurisdictions also tax SaaS and other digital products and services, so local sales tax applies in addition to the state rate.
Businesses that have nexus in Louisiana — a physical presence or more than $100,000 in annual sales in the state — need to collect sales tax on Louisiana sales and remit the amounts to the appropriate tax authorities (more on nexus later in this article). Failure to comply with sales tax laws can lead to significant fines and other penalties.
The good news is that there are many tools you can use to simplify tax compliance. This article will explain everything you need to know about SaaS taxation rules in Louisiana, as well as how Numeral can greatly simplify tax compliance for SaaS businesses.
Under HB8, sales tax applies to a range of digital products, including software, audiovisual material, books, audiobooks, games, and artwork, as well as “any other otherwise taxable tangible personal property transferred electronically, whether digitally delivered, streamed, or accessed and whether purchased singly, by subscription, or in any other manner, including maintenance, updates, and support.”
However, the law has two important exemptions: purchases for business use and healthcare applications.
Specifically, the law exempts digital products and services that a business buys exclusively for commercial purposes and uses directly to produce taxable goods or services for sale. It also exempts products and services used by “licensed healthcare facilities and providers for storing or transmitting healthcare information or for the diagnosis or treatment of a medical condition.”
HB8 offers welcome clarity on whether SaaS is taxable at the state level in Louisiana. To complicate matters, however, Louisiana also allows different parishes and other local jurisdictions to create and charge their own tax rates.
With that in mind, you could have SaaS transactions in Louisiana that require you to charge, collect, and remit sales tax to the state’s Department of Revenue and to local parish tax authorities. So you will need to understand the laws in different parishes if you do business in Louisiana.
Tax laws also vary from state to state, which adds to the challenge of staying compliant.
Consulting with tax professionals and/or using a platform such as Numeral can help you create a streamlined tax collection and remittance system, save time, and prevent mistakes.
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The term “nexus” describes a business’s connection to a state. In Louisiana, as in many states, there are two types of nexus: physical and economic. Physical nexus is established if your business has a physical presence in the state, such as a retail store, an office, a warehouse, or employees.
Economic nexus is established if your business earns more than $100,000 in sales in the previous or current calendar year.
If nexus is established, then your business is obligated under the law to collect and remit sales tax on qualifying sales. You can learn more about how to file sales tax in Louisiana in our full guide.
HB8 made digital products taxable; the bill defines “digital goods” as:
The same exemptions for business and healthcare use apply to the purchase of digital goods.
Infrastructure as a service, or IaaS, is a digital service that is considered a tangible, taxable digital product in Louisiana. The same exemptions for business use and healthcare services apply to IaaS.
In Louisiana, the state sales tax rate is 5%, as of 2025. Tangible personal property, which includes many digital goods, is taxable. On top of this rate, local parishes have the authority to set their own tax rates, and local sales tax applies to SaaS and other digital goods. The state provides a tool that allows you to look up tax rates for Louisiana parishes and municipalities.
Here’s an example of how a SaaS sale might be taxed in Louisiana.
Suppose your SaaS business sells a subscription to a customer in Jefferson Parish, Louisiana. Since Jan. 1, 2025, SaaS is taxable at the local level as well as the state level. If your business has a sales-tax collection obligation in Louisiana and no exemption applies, you must collect the applicable state and local sales taxes.
Louisiana’s state rate is 5%, and Jefferson Parish’s general local rate is 4.75%, producing a combined rate of 9.75%.
If your business has nexus in Louisiana, you must register with the Louisiana Department of Revenue. Then you’ll be responsible for charging and collecting the correct rate for each transaction and remitting the correct amount to the tax agency in a timely manner.
Failing to pay the amount required by law will result in fines. The late-payment penalty is 5% of the unpaid tax for each 30-day period, up to 25%. If you aren’t aware that you owe tax, your tax debt could escalate quickly.
You can simplify the process and avoid fines and penalties by outsourcing your tax compliance needs to a business like Numeral.
You can find the text of HB8, which specifically addresses digital products and services, here. You can also find an overview of the state’s sales and use tax laws here, and the exemption information here.
You can register as a remote seller in the state here.
In Louisiana, SaaS is taxable as of January 1, 2025. If your business has nexus in Louisiana, you have to collect and remit sales tax on nonexempt sales in the state. Parishes and municipalities in Louisiana also charge local sales tax on SaaS transactions.
Numeral can take the worry and hassle out of sales tax compliance with comprehensive 24/7 sales monitoring, state tax registration services, timely tax filing and remittance, and prompt customer service.
The trusted solution for U.S. sales tax, VAT, and GST compliance, used by 3,500+ global businesses.
