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, some parishes and other local municipalities in Louisiana levy an additional sales tax on certain digital products and services, including SaaS.
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.
Taxation rules in Louisiana
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 are sold or licensed “exclusively for commercial purposes,” or products and services that are 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 some welcome clarity on the question of 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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Nexus rules in Louisiana
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.
What about digital goods?
HB8 made digital products taxable; the bill defines “digital goods” as:
- Audiovisual works
- Audioworks
- Books
- Codes
- Applications
- Games
- Periodicals
- Discussion forums
- Any other “tangible personal property transferred electronically”
The same exemptions for business and healthcare use apply to the purchase of digital goods.
What about IaaS?
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.
Understanding Louisiana’s unique tax system
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 many do charge sales tax on SaaS and other digital goods.
The state provides a tool that allows you to look up tax rates for Louisiana parishes and municipalities.
Hypothetical business scenario
Here’s an example of how a SaaS sale might be taxed in Louisiana. Say that you’re a SaaS business and you have a customer living in Jefferson Parish, Louisiana.
The parish’s guidelines state that computer software is considered tangible property, regardless of how it is delivered, so your transaction would likely be taxable on the local level. There are a few exceptions to this rule. Your transaction might not be taxable if all of the following statements apply to the transaction:
- The customer never gets control or possession of the software.
- The customer does not download or install libraries or proprietary drivers.
- The software is located on a server outside of the state.
- Software is accessible through a domain name or IP address.
- Each transaction requires a real-time call with the software company.
- Access to the software is based on a subscription and ends with nonpayment from the customer.
On top of the 5% state sales tax you must collect if you have a nexus in Louisiana, you may also have to collect a parish sales tax if the transaction is not exempted under local rules. In Jefferson Parish, the local sales tax rate is 4.75%, making the total sales tax for a sale there 9.75%
Importance of accurate tax collection and remittance
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.
Failure to pay the correct amount as required by law will result in fines. The failure-to-pay penalty is 0.5% of the tax that isn’t remitted for each 30-day period. If you aren’t aware that you owe a tax, your tax debt burden could escalate quickly.
You can simplify the process and avoid fines and penalties by outsourcing your tax compliance needs to a business like Numeral.
Additional resources for staying compliant
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.
The bottom line
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. Some parishes and municipalities in Louisiana require you to collect and remit additional 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.
