Louisiana Administrative Code › Title 13 - ECONOMIC DEVELOPMENT › Part I - Financial Incentive Programs › Chapter 7 - Enterprise Zone Program › Section I-707 - Items Eligible for Sales and Use Tax Rebate [Formerly Section 721]

Current through Register Vol. 50, No. 6, June 20, 2024
A. Materials that
				are permanently installed at the project site during the project period are
				eligible for sales and use tax rebates.
B. Materials that originate from a contractor
				or subcontractor's inventory and are permanently installed at the project site
				during the project period are eligible for sales and use tax rebates. In order
				for rebates to be issued on property withdrawn from inventory, the contractor
				or subcontractor must maintain sufficient records and provide sufficient
				information to enable the Department of Revenue to verify that Louisiana sales
				or use taxes were paid on the property for which rebate is claimed.
C. Machinery and equipment purchased for the
				project during the project period are eligible for sales and use tax rebates
				provided that the machinery and equipment are used exclusively at the project
				site, are owned by an entity named in the enterprise zone contract, and are
				intended to remain at the project site for the expected useful life of the
				machinery and equipment.
D.
				Machinery and equipment transferred into Louisiana for the project during the
				project period are eligible for sales and use tax rebates provided that the
				machinery and equipment are used exclusively at the project site, are owned by
				an entity named in the enterprise zone contract, and are intended to remain at
				the project site for the expected useful life of the machinery and
				equipment.
E. Software purchased,
				capitalized, and used by the business primarily at the project site during the
				project period is eligible for sales and use tax rebates.
F. Consumable items are not eligible for
				sales and use tax rebate. Ineligible items include but are not limited to: per
				diem, labor, service contracts, storage, freight, radios, laptop computers,
				utilities, permits and fees, office supplies, construction consumables, blades,
				drill bits, PVC sheeting, tape, gloves, dusk masks, and all leases and
				rentals.
G. Lease-purchases may be
				eligible for a sales and use tax rebate upon Department of Revenue's approval.
				The property acquired through lease-purchase must be used exclusively at the
				project site, must be owned by an entity named in the enterprise zone contract,
				and must be intended to remain at the project site for the expected useful life
				of the machinery and equipment. A copy of the lease-purchase agreement must be
				submitted with the claim for rebate request to Department of Revenue, Office
				Audit Division.
H. A lease of an
				improvement to immovable property may be eligible for sales and use tax rebate
				upon the following conditions:
1. the
				improvements were made with the specific intent to enter into a lease agreement
				for the use of the improvements by the business, that is, an agreement to lease
				the improvements must exist before construction begins;
2. at its inception the lease must meet one
				or more of the following four criteria:
a. the
				lease transfers ownership of the property to the lessee by the end of the lease
				term;
b. the lease contains a
				bargain purchase option;
c. the
				lease term must be a minimum of twenty years;
d. the present value of the minimum lease
				payments, excluding any portion of the payments representing costs such as
				insurance, maintenance, and taxes to be paid by the lessor, equals or exceeds
				90 percent of the fair value of the leased property; and
3. rebates shall be paid to the
				lessee.