Louisiana dealers who collect state sales tax can keep 1.05 percent of what they collect as vendor’s compensation for Louisiana sales tax, up to a maximum of $750 per dealer per month, under La. R.S. 47:306(A)(3). The credit is conditional: you only get it if you file your return and pay the full tax due on or before the 20th of the month following the reporting period. Miss that date, and the compensation for that period is gone.
Who Qualifies
Every registered dealer in Louisiana who collects state sales tax is eligible. The one condition that matters is timeliness. File and pay by the 20th and you may claim the credit; file one day late and you forfeit it entirely for that reporting period. There is no partial credit, no grace period, and no way to recover the lost amount on a later return. A dealer who files three months late loses the same amount of compensation as one who files a day late: all of it.
Rate and the $750 Monthly Cap
The rate is 1.05 percent of the total state sales tax due for the reporting period. You apply the percentage to your net state tax liability after other credits but before subtracting the vendor’s compensation itself. The result is what you deduct from your remittance to the Louisiana Department of Revenue.
State law caps the deduction at $750 per calendar month per dealer. Act 11 of the 2024 Third Extraordinary Session lowered this cap from the previous $1,500 limit, effective for taxable periods beginning on or after January 1, 2025. If 1.05 percent of your tax collected exceeds $750, you stop at $750.
The ceiling applies per dealer, not per location. A business with five storefronts across Louisiana still cannot claim more than $750 total for the month. One nuance in the statute: any credit you claim for taxes already paid to a wholesaler cannot be deducted when computing your compensation. The 1.05 percent is calculated on the tax you actually owe, not on a figure reduced by wholesale credits.
How to Claim It on Form R-1029
Vendor’s compensation is claimed directly on Form R-1029, the standard Louisiana Sales Tax Return. Before filling it out, pull three figures from your records for the period: total gross sales, the portion of those sales subject to state tax, and the exact state sales tax collected from customers.
Form R-1029 includes a specific line for vendor’s compensation. Multiply your net state tax liability by 0.0105, cap the result at $750, and enter that figure. Your final payment equals the state tax collected minus the compensation you entered.
The Department of Revenue directs dealers to file electronically through the Louisiana Taxpayer Access Point (LaTAP) on the department’s website. Electronic filing generates an immediate timestamped confirmation, which matters when the 20th-of-the-month deadline is at stake. If you mail a paper return, the postmark controls timeliness, so build in lead time. Either way, keep the confirmation number or postmark receipt.
Monthly and Quarterly Filers
Most Louisiana dealers file monthly, but the state allows quarterly filing for certain lower-volume dealers. The same rules apply either way: file and pay by the deadline, use the 1.05 percent rate, and respect the $750 monthly cap for each month within the quarter. Check your registration or contact the Department of Revenue to confirm your filing frequency.
What Late Filing Costs
Filing after the 20th does more than cost you the compensation. Louisiana adds a late-filing penalty that starts at 5 percent of the tax owed for the first 30 days of delinquency, with another 5 percent for each subsequent 30-day period, up to 25 percent of the total tax due. Interest also runs on unpaid balances. For 2025, the annual interest rate on unpaid state taxes was 11.25 percent, which is three percentage points above the judicial interest rate under La. R.S. 47:1601(A)(2). Between the forfeited credit, the escalating penalty, and interest, a missed deadline gets expensive quickly.
Local and Parish Compensation Is Separate
The 1.05 percent rate and $750 cap apply only to state sales tax. Louisiana’s parishes and local taxing jurisdictions set their own vendor compensation rates independently, and those rates vary. Some localities offer a vendor discount; others do not. The Louisiana Uniform Local Sales Tax Board maintains a rate lookup tool that provides local vendor compensation rates by location. If you collect both state and local tax, check with each local collector to find out whether a separate local discount applies and at what rate.
Records to Keep
Louisiana law requires every dealer collecting sales tax to maintain complete records of taxable transactions, including invoices, bills of lading, purchase records, and other documentation supporting the figures on your return. Records must be kept until the related taxes have prescribed, meaning the period during which the state can still assess additional tax has expired.
As a practical matter, keep sales tax records for at least five years from December 31 of the year the tax became due. If any dispute, refund claim, or litigation is pending, hold the records until the matter is fully resolved, no matter how much time has passed. For vendor’s compensation specifically, an auditor will verify that your calculation matches the tax actually collected and remitted, and discrepancies between gross sales, taxable sales, and tax collected are among the first things the department’s systems flag. Organized monthly records keep that review routine.