New Tax Changes from the Southwest

Read this article for new sales tax updates from states in the Southwest!

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Louisiana: State sales tax rate increasing to 5% beginning January 1, 2025

The Louisiana state sales tax rate has increased to a total of 5%. House Bill 10 provides a temporary increase of the state rate from 4.45% to 5% effective January 1, 2025, through December 31, 2029. After December 2029, the rate will reduce to 4.75%. Louisiana taxpayers should note this change is only to the state rate, which is in addition to the parish rate.

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Mississippi: New Method for Submitting Voluntary Disclosure Agreements

The Mississippi Department of Revenue (DOR) has introduced a new method for taxpayers to submit Voluntary Disclosure Agreements (VDAs) by emailing requests to [email protected]. This change streamlines the process, which previously required mailing a letter to the DOR.

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Louisiana: Digital Products are subject to sales tax beginning January 1, 2025

Louisiana has expanded its sales tax to include digital products such as audiovisual works, audio works, books, games, periodicals, and remotely accessed software (SaaS). Certain exemptions apply for products used exclusively for commercial purposes, directly in the production of taxable goods or services, or created solely for the business needs of the purchaser.

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Texas: Guidance Issued on Taxability of Certification Services and Registration Fees Provided to Learning Centers

The guidance clarifies that while certification services are not subject to Texas sales and use tax, registration fees for maintaining student certification information in an online repository are considered taxable data processing services.

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Oklahoma: Machinery Used in Digital Asset Mining is Exempt from Sales Tax

Effective November 1, 2024, Oklahoma exempts sales of machinery, equipment, and electricity used for commercial digital asset mining in colocation facilities from sales tax. Eligible items include servers, computers, power distribution units, and software.

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Oklahoma: Amendment of Definitions of Food and Food Ingredients for Sales Tax Exemption

The state has clarified definitions for "prepared food," "bottled water," and "food sold with eating utensils provided by the seller" to guide tax applicability. Sellers must annually calculate their Prepared Food Sales Percentage (PFS%) to determine the correct tax rates for their products.

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Are you looking to learn more about these news updates? Join us at our next live webinar, Sales Tax in the Southwest Region: Keeping It Clear in the Sunbelt. We’ll be live on January 29 at 1 pm ET / 10 am PT. Click here to uncover more.