LA Sales Tax Increases for Contractors
Recent changes to Louisiana sales tax laws may impact your business if you have construction contracts that were entered into and reduced to writing prior to or within ninety days of the sales and use tax increase that took effect on January 1, 2025.
We have compiled four key documents outlining the actions you must take to ensure these preexisting contracts remain subject to the prior sales tax rate. You can access them by clicking here or using the button below.
Summary of Documents:
- RIB 25-007 (Issued 12/23/2024) – This bulletin provides information about the exclusions and exemptions for specific construction contracts as outlined in the Louisiana Revised Statutes. It indicates that these contracts are not subject to the additional 0.55% sales tax. For further guidance, the bulletin refers the reader to RIB 16-016.
- RIB 16-016 (Issued 04/19/2016) – This bulletin provides comprehensive information regarding contracts that are exempt from the tax rate increase. It also clarifies which contracts finalized after January 1, 2025, will be exempt from the rate increase. Taxpayers are instructed to submit LA Form R-1075 to the Louisiana Department of Revenue.
- LA Form R-1075 – Application to Utilize Revised Statute 47:305.11 for Contracts Prior To and Within 90 Days of Tax Levy – Must be submitted to the Louisiana Department of Revenue for each contract eligible for exemption.
- LA Form R-20127 – Can be used to request a refund for overpaid sales tax (the additional 0.55%) on applicable jobs where an exemption certificate was not initially available.
Once the application is approved by the Louisiana Department of Revenue, Form R-1074 – Contracts Prior To and Within 90 Days of Tax Levy – is issued to the contractor. The contractor will then provide this document to its vendors in order to pay sales tax at the previous rate.
Please review the documents and take any necessary action to ensure compliance. As always, please feel free to contact us if you have any questions.