Louisiana Administrative Code › Title 61 - REVENUE AND TAXATION › Part I - Taxes Collected and Administered by the Secretary of Revenue › Chapter 43 - Sales and Use Tax › Section I-4301 - Uniform Sales and Local Sales Tax Definitions

Current through Register Vol. 50, No. 6, June 20, 2024
A. General. Words and phrases shall be read with their
				  context and the specific section of law to which they are applicable. They
				  shall be construed according to the common usage of the language. Technical
				  words and phrases, and such others as may have acquired a peculiar meaning in
				  the field of taxation shall be construed according to such peculiar meaning.
				  The word
shall
is mandatory and the word
may
is permissive. Unless otherwise clearly indicated, words used in singular
				  include the plural and words used in the plural include the singular.
B. Words, terms and phrases defined in
				  R.S.
				  47:301(1) through
				  R.S.
				  47:301(27), inclusive, have
				  the meaning ascribed to them therein and as further provided in §4301. C
C. All examples included in the text of these rules and
				  regulations are for illustration only and in no case should they be construed
				  to impose a limitation.
Business
-
a.
Business
covers any activity reasonably
				  expected to result in gain, benefit or advantages, either directly or
				  indirectly; the fact that operations resulted in a loss or did not provide the
				  expected benefits or advantages would not eliminate an activity from the
				  business classification. It is intended that some degree of continuity,
				  regularity or permanency be involved so that the doing of any single act
				  pertaining or related to a particular business would not be considered engaging
				  in or carrying on that business; a series of such acts would be so
				  considered.
b. Continuous employment, occupation, or profession engaged
				  in for livelihood which occupies the majority of time and attention, or
				  activity in which time and capital are invested on future outcome are within
				  the meaning of
business
just as barter or exchange of things,
				  rights or services for value are within the meaning of
business
. It is not necessary for any activity to constitute
				  the sole occupation to remain within the intended definition.
c. The term
business
does not include
				  isolated and occasional sales by persons who do not hold themselves out as
				  engaged in business. This exclusion clearly applies to sales made by the owners
				  of property who had acquired the property for use or consumption, and is not
				  engaged in selling similar property on a repeated or continuing basis.
d. Whether an activity constitutes the carrying on of a
				  business demands an analysis of the continuing nature of the activity, and may
				  change with respect to any particular person. By way of example, trustees or
				  receivers conducting a continuing retail merchandising activity, even though
				  solely by court order, would be construed to be in the merchandising business,
				  while the sale conducted by the same trustees or receivers in order to
				  liquidate the business pursuant to a later court order would not be construed
				  to be carrying on a business. Further, the occasional sale of used equipment
				  made by a person engaged in the equipment rental business would not be
				  construed to constitute the business of selling equipment, but if the same
				  lessor of equipment frequently, routinely or continuously offered used
				  equipment for sale, then he would be construed to be engaged in that
				  business.
Collector
a. In reference to
state sales
or
use tax
:
i.
Collector
-the secretary and the
				  secretary's duly authorized assistants. Any duly authorized representative of
				  the collector, when acting under his authority and direction, has the same
				  powers and responsibilities as the collector, but only to the extent so
				  delegated.
ii.
Secretary
-the Secretary of the
				  Department of Revenue of the state of Louisiana.
b. In reference to
local sales
or
				  use tax
:
i.
Collector
-the director, tax
				  administrator, commission, or collector of revenue for the jurisdiction and
				  includes the collector's duly authorized assistants. Any duly authorized
				  representative of the collector, when acting under his authority and
				  direction, has the same powers and responsibilities as the collector, but only
				  to the extent so delegated.
ii. Article VII, Section 3 of the Constitution of Louisiana
				  and
				  R.S.
				  47:337.14 provide that sales and use taxes
				  levied by a political subdivision shall be collected by a centralized parish
				  wide collector or commission.
c. The authority to make assessments, impose or waive
				  penalties, enter into agreements legally binding upon the taxing authority
				  relative to extensions of time, for filing, running of prescriptive periods,
				  installment payments of tax liability, and the filing and release of
				  assessments and liens has been delegated extremely sparingly. Most employees of
				  the taxing authority do not have authority to perform these functions on behalf
				  of the collector . Questions involving any of those legal actions should be
				  addressed directly to the collector, who has sole power to delegate his
				  authority in those areas.
d. No action taken by any employee shall be binding upon the
				  collector unless specific authority has been delegated to the employee for the
				  type of action taken.
Commercial Farmer
-
a. Commercial Farmer is defined by
				  R.S.
				  47:301(30) to mean persons,
				  partnerships or corporations who:
i. are occupationally engaged in producing food or
				  agricultural commodities for sale or for further use in producing food or such
				  commodities for consumption or sale;
ii. regularly engage in the commercial production for sale of
				  vegetables, fruits, crops, livestock and other food or agricultural products;
				  and
iii. report farm income and expenses on a federal Schedule F
				  or similar federal tax form, including but not limited to, Forms 1065, 1120 and
				  1120S under a North American Industry Classification System (NAICS) Code
				  beginning with 11.
b. For purposes of this definition, agricultural products
				  shall mean any agronomic, aquacultural, floricultural, horticultural,
				  maricultural, silvicultural, or viticultural crop, livestock or product.
c. For purposes of this definition livestock means any
				  animal, except dogs and cats. This definition includes bees, cattle, buffalo,
				  bison, oxen, and other bovine; horses, mules, donkeys and other equine; sheep;
				  goats; swine; domestic rabbits; fish, turtles, and other animals identified
				  with aquaculture that are located in artificial reservoirs or enclosures that
				  are both on privately owned property and constructed so as to prevent, at all
				  times, the ingress and egress of fish life from public waters; imported exotic
				  deer and antelope, elk, farm-raised white tailed deer, farm-raised ratites, and
				  other farm-raised exotic animals; chickens, turkeys, and other poultry; and
				  animals placed under the jurisdiction of the commissioner of agriculture and
				  forestry and any hybrid, mixture, or mutation of any such animal.
d. A person, partnership or corporation shall not be
				  considered a commercial farmer if their livestock or crops are produced or
				  maintained for reasons other than commercial use, such as recreational or
				  personal consumption.
e. In order to file a Schedule F or similar federal tax form,
				  a farm must be operated for profit. If farming activity is not carried on for
				  profit, as defined in
				  26 CFR
				  1.183-2, then expenses must be itemized on a
				  Schedule A.
f. The department will issue certifications to commercial
				  farmers upon application and satisfaction of all legal requirements.
Cost Price
a.
Cost price
is defined by
				  R.S.
				  47:301(3) to mean the lesser
				  of:
i. the reasonable market value of the tangible personal
				  property at the time it becomes susceptible to the use tax; or
ii. the actual cost of the article subject to the use tax
				  liability;
iii. the lesser of the two values applies, regardless of the
				  manner by which the property was acquired, whether by purchase, by manufacture,
				  or otherwise, and regardless of whether acquired within the taxing jurisdiction
				  or outside the taxing jurisdiction.
b. The statutory requirement for a comparison between
				  reasonable market value and actual cost necessarily demands that both elements
				  being compared be on a comparable basis.
c. For purposes of the comparison, the reasonable market
				  value of tangible personal property is the amount a willing seller would
				  receive from a willing buyer in an arms length exchange of similar property at
				  or near the location of the property being valued. The amount which would be
				  realized from a forced sale is not acceptable as the market value for this
				  purpose.
d. In arriving at actual cost of tangible personal property
				  for the purpose of the required comparison, all labor and overhead costs which
				  are billed to the purchaser of the property, except for separately stated
				  installation charges, are included. In the case of property manufactured;
				  fabricated and/or altered to perform a specific function prior to the tax
				  incident, every item of cost must be included. Thus, material, labor, overhead,
				  and any other cost of any nature whatsoever must be included. However; labor,
				  overhead, and other costs which represent services rendered to the property by
				  the owner or his employees are not to be included.
Employees
,
				  are defined to mean personnel who are on the property owner's payroll on a
				  permanent basis, and not for the sole purpose of completing the immediate tasks
				  of rendering their services to the property in question, and for which all
				  payroll taxes are withheld and remitted by the property owner. The only
				  transportation charges which are to be included in the cost are the
				  transportation charges which can be identified as part of the acquisition cost
				  of materials, and only in cases wherein the transportation was either performed
				  or arranged by the vendor of the materials.
e. Although the point of tax incidence is at the location of
				  use, the transportation charges for transporting the property from the owner's
				  location of storage to the point of tax incidence is not included in the
				  cost.
f. In the case of property withdrawn from stock by a
				  manufacturer holding similar property for resale, no element of profit will be
				  added to cost in calculating the amount to be used in comparison with market
				  value.
g. Since installation is not included as a taxable service,
				  the cost of installing tangible personal property should not be included in
				  cost price if such cost were separately billed or accounted for at the time of
				  installation so as to afford positive identification. In the absence of
				  separate billing or accounting for installation costs, they will be included in
				  arriving at actual cost .
				  R.S.
				  47:301(3)(c) specifically
				  provides that the separately stated charge made by oil field board road dealers
				  for the initial furnishing and installation of board roads shall not be
				  included in the cost price of the rental or sale.
h. Under
				  R.S.
				  47:301(3)(i), machinery and
				  equipment is excluded from cost price if the property is used to manufacture
				  tangible personal property for sale to another or is used directly in the
				  production, processing, and storing of food, fiber, or timber for sale; is used
				  predominantly and directly in the manufacturing process or in the actual
				  manufacturing for agricultural purposes; and is eligible for depreciation for
				  federal income tax purposes. The exclusion is subject to a phase-in between
				  July 1, 2004, and June 30, 2010. The exclusion applies only to manufacturing
				  businesses that have been assigned, by the Louisiana Department of Labor, North
				  American Industrial Classification System (NAICS) codes within the
				  agricultural, forestry, fishing, and hunting Sector 11 or the manufacturing
				  Sectors 31 through 33 as they existed in 2002. Businesses that are not
				  registered with the Louisiana Department of Labor or that have not been
				  assigned these NAICS codes are not eligible to claim this exclusion. The
				  exclusion applies to state sales or use tax and local sales or use tax if the
				  political subdivision has adopted this exclusion by ordinance.
i.
(a).
Manufacturing
-putting raw materials
				  through a series of steps that brings about a change in their composition or
				  physical nature in order to make a new and different item of tangible personal
				  property that will be sold to another. The manufacturing process begins when a
				  raw material is introduced into the first machine or item of equipment that
				  begins the change of the composition or physical nature of the raw materials
				  into another product. The manufacturing process ends when the final product for
				  sale has been placed into the packaging that will normally be delivered to the
				  final consumer.
(b).
Manufacturing for Agricultural
				  Purposes
-the activities involved in the production, processing, and
				  storing of food, fiber and timber for sale. Manufacturing for agricultural
				  purposes begins when the soil or field is prepared for planting and ends when
				  the harvested product is removed from the farm.
ii.
(a). For machinery or equipment used to manufacture tangible
				  personal property for sale,
used predominantly
means that more
				  than 50 percent of the property's use is in the process of causing a change in
				  the composition or physical nature of the raw materials that are to become a
				  final product for sale.
(b). For machinery or equipment used to produce, process, and
				  store food, fiber, or timber for sale,
used predominantly
means the property is used more than 50 percent of the time in the production,
				  processing, and storing of food, fiber, or timber for sale. Equipment that
				  remains idle between growing seasons is considered used for the production,
				  processing, and storing of food, fiber, or timber during that time.
iii.
(a). For a manufacturer of tangible personal property for
				  sale,
used directly
describes the manner in which the
				  machinery or equipment used in a plant facility alters the physical
				  characteristics of the product during the manufacturing process.
Used
				  directly
means that the machinery and equipment must have an immediate
				  effect upon those products manufactured for ultimate sale to another person.
				  Machinery and equipment used to manufacture intermediate products for internal
				  use, such as manufacturing tools, internally consumed energy, and processing
				  chemicals do not qualify for the exclusion.
(b). For a manufacturer of food, fiber, or timber for sale,
used directly
describes the manner in which the machinery or
				  equipment is involved in the manufacturing for agricultural purposes.
Used directly
means that the machinery and equipment must have
				  an immediate effect upon the production, processing, or storing of food, fiber,
				  or timber. Examples of machinery and equipment used directly in manufacturing
				  for agricultural purposes include machinery and equipment for planting,
				  cultivating, fertilizing, spraying, harvesting, producing, processing, and
				  storing of food, fiber, or timber for sale. This exclusion includes materials
				  used in the construction of facilities used to store the food, fiber, or timber
				  for sale. Machinery and equipment used directly in manufacturing for
				  agricultural purposes does not include facilities used to store equipment.
iv.
Eligible for Depreciation
-the machinery
				  or equipment is a principal component of the manufacturing process and has a
				  substantially useful life beyond the taxable year, although it does not have to
				  be capitalized and depreciated to qualify for exclusion. Examples of property
				  considered eligible for depreciation are robotic welding machines in a vehicle
				  manufacturing plant; pumps, valves, and compressors in a petrochemical plant;
				  and tractors, trailers, and harvesting equipment on a commercial farm. Examples
				  of items that do not qualify include nuts, bolts, gaskets, lubricants, filters,
				  and fuel.
v. The following also qualify for exclusion as manufacturing
				  machinery and equipment:
(a). computers and software that control, communicate with or
				  control other computer systems that control, or control heating or cooling
				  systems for machinery or equipment that manufactures tangible personal property
				  for sale. Computers and software used for inventory and accounting systems or
				  that control non-qualifying machinery and equipment do not qualify for the
				  exclusion;
(b). machinery and equipment necessary to control pollution
				  at a plant facility where pollution is produced by the manufacturing operation.
				  For purposes of this exclusion, machinery and equipment necessary to control
				  pollution includes equipment that reduces the volume, toxicity, or potential
				  hazards of the waste products generated by the manufacturing operation or
				  transforms the waste product for reuse in the manufacturing operation;
				  and
(c). machinery and equipment used to test or measure raw
				  materials, the property undergoing manufacturing, or the finished product, when
				  such test or measurement is a necessary part of the manufacturing process. This
				  includes machinery and equipment used to test the quality or quantity of the
				  product for sale before, during, or after the manufacturing process.
vi. Persons acting as mandataries (agents) of manufacturers
				  can claim the exclusion on purchases of qualifying machinery and equipment that
				  will ultimately be used by a business assigned an eligible NAICS code by the
				  Department of Labor. The mandatary must obtain the manufacturer's exclusion
				  Form R-1071 and provide it, with a copy of the contract of mandate or the
				  Department's Form R-1072 (Manufacturer's Designation of Mandate), to the seller
				  at the time of purchase.
vii. Repairs to manufacturing machinery and equipment to keep
				  the property in an ordinarily efficient working order generally do not qualify
				  for exclusion under
				  R.S.
				  47:301(3)(i) because neither
				  the labor nor the materials used in these repairs are eligible for depreciation
				  for federal income tax purposes. However, the purchase of tangible personal
				  property used in the repair would qualify for the exclusion provided the
				  property is a major component of the manufacturing process and has a
				  substantially useful life beyond the current period.
viii. Charges for labor and materials that are classified as
				  capital improvements under Internal Revenue Service Regulations may be excluded
				  as follows.
(a). Charges for labor are excluded from tax when performed
				  on qualifying manufacturing machinery and equipment that is movable property at
				  the time of the capital improvement. The vendor that provides the labor is
				  allowed to treat the materials used as purchased for resale. All materials that
				  are incorporated into qualifying machinery and equipment during the capital
				  improvement qualify for exclusion from tax.
(b). Materials incorporated into qualifying manufacturing
				  machinery and equipment that is immovable property at the time of the capital
				  improvement are eligible for exclusion as follows.
(i). In instances when a manufacturer purchases materials
				  that will become a component part of qualifying machinery or equipment, the
				  materials are excluded from tax.
(ii). A repair vendor's purchases of materials that will
				  become component parts of qualifying machinery or equipment are excluded from
				  tax if the vendor has been designated as a mandatary of a manufacturer. The
				  vendor must obtain the manufacturer's exclusion Form R-1071 and provide it,
				  with a copy of the contract of mandate or the department's Form R-1072, to the
				  seller at the time of purchase. Manufacturers that supply this form to their
				  mandataries must maintain a schedule of the tangible personal property used in
				  these capital improvements.
(c). Purchases of spare machinery and equipment, such as
				  compressors, pumps, and valves, qualify for the exclusion provided these items
				  satisfy the definition of machinery and equipment provided in
				  R.S.
				  47:301(3)(i). Spare
				  machinery and equipment, such as bolts, nuts, gaskets, oil, etc., which cannot
				  be depreciated for federal income tax purposes, do not qualify for the
				  exclusion.
Dealer
a. State and local sales or use tax is imposed upon the sales
				  of tangible personal property within a taxing jurisdiction, the use,
				  consumption, distribution and the storage for use or consumption within a
				  taxing jurisdiction of tangible personal property, the lease or rental within a
				  taxing jurisdiction of tangible personal property, and upon the sales of
				  certain services. The tax in each instance is collectible from the
				  dealer.
b. In view of the total reliance of the sales tax statutes
				  upon the dealer for collection of the tax, the law meticulously ascribes to the
				  term
dealer
the broadest possible meaning relevant to the
				  taxes imposed by the taxing jurisdictions .
				  R.S.
				  47:301(4) clearly holds
				  either party to any transaction, use, consumption, storage, or lease involving
				  tangible personal property and either the performer or recipient of services
				  liable for payment of the tax through the broad statutory definition of
dealer
.
c.
				  R.S.
				  47:301(4) includes as a
dealer
every person who manufactures or produces tangible
				  personal property for sale at retail, use, consumption, distribution or for
				  storage to be used or consumed in a taxing jurisdiction . Thus, the firm which
				  manufactures or produces a product used or consumed by it in the conduct of its
				  business becomes a dealer for sales and use tax purposes, even though none of
				  that particular product is offered for sale.
d. Any person who imports property into a taxing jurisdiction, or who causes property to be imported into a taxing jurisdiction is a dealer
				  for purposes of the sales and use tax whether the property is to be used,
				  consumed, distributed, or for storage to be used or consumed in the taxing
				  jurisdiction, or is intended for resale.
e. Persons who sell tangible personal property, who hold such
				  property for sale, or who have sold tangible personal property are dealers .
				  Similarly, any person who has used, consumed, distributed or stored tangible
				  personal property for use or consumption in a taxing jurisdiction is defined as
				  a
dealer
, unless it can be proved that sales or use tax has
				  previously been paid to the taxing jurisdiction to the extent required by
s
tate and local sales or use tax law on the particular
				  item.
f. Both the lessor (or rentor) and the lessee (or rentee) are
				  defined as
dealer
s by the statute, as are both the person who
				  performs services of a nature subject to tax and the person for whom the
				  services are performed. See
				  R.S.
				  47:301(14) and LAC
				  61:I.4301.C.
Sales of Services
for a list of the services
				  subject to the tax.
g.
Dealer
also includes any person engaging
				  in business in a taxing jurisdiction . See
				  R.S.
				  47:301(1) and LAC
				  61:I.4301.C.
Business
for the definition of
business
.
Engaging in business
is further
				  defined to include the maintaining of an office, distribution house, sales
				  house, warehouse or other place of business, either directly, indirectly, or
				  through a subsidiary or through a seller authorizing an agent, salesman or
				  solicitor to operate within a taxing jurisdiction or by permitting a subsidiary
				  to authorize the solicitation activity. Engaging in business also includes
				  making deliveries of tangible personal property into a taxing jurisdiction by
				  any means other than by a common or contract carrier. Qualification to do
				  business within a taxing jurisdiction is not among the considerations of
				  whether a person is engaged in business for this purpose. Neither is it
				  material whether the place of business or personnel are permanent or temporary
				  in nature.
h. Persons who sell tangible personal property to operators
				  of vending machines are dealers.
i. For state sales or use tax purposes, such sales are
				  taxable
sales at retail
as defined under
				  R.S.
				  47:301(10)(b) and LAC
				  61:I.4301.C.
Retail Sale or Sale at Retail
. A vending machine
				  operator is also a dealer, however, his sales of tangible personal property
				  through coin-operated vending machines are not retail sales.
ii. For local sales or use tax purposes, such sales are sales
				  for resale. A vending machine operator is a dealer and must report his sales of
				  tangible personal property through coin-operated vending machines as retail
				  sales.
i.R.S.
				  47:301(4)(i) also includes
				  in the definition of
dealer
any person who makes deliveries of
				  tangible personal property into a taxing jurisdiction in a vehicle which is
				  owned or operated by that person.
Drugs
-
a.R.S.
				  47:301(20) applies a broader
				  definition of
drugs
than the term indicates in common usage,
				  for purposes of applying the exemption from state sales or use tax, which is
				  offered under
				  R.S.
				  47:305(D)(l)(j) and (s).
				  This definition encompasses not only pharmaceutical remedies and chemical
				  compounds, but also medical devices which are prescribed for use in the
				  treatment of any medical disease. Devices which do not properly fall into the
				  already established categories of orthotic or prosthetic devices or patient
				  aids, could qualify for this category of tangible personal property. Examples
				  of these would be pace-makers and heart catheters.
b. Except as otherwise provided, the exemption for drugs and
				  medical devices does not apply to local sales or use tax.
Gross Sales
-
a.
Gross Sale
-the total of the sales prices
				  for each individual item or article of tangible personal property subject to
				  state or local sales or use tax with no reduction for any purpose, unless
				  specifically provided by statute.
b. The only deductions allowed from the total of the sales
				  prices of all items of tangible personal property subject to tax are those
				  provided in
				  R.S.
				  47:301(13),
				  R.S.
				  47:315, and
				  R.S.
				  47:337.34.
c.R.S.
				  47:301(13)(a) permits the
				  total sales price of an article of tangible personal property to be reduced by
				  the part of the selling price represented by an article traded in. The allowed
				  deduction is not to exceed the market value of the item traded in. For this
				  purpose, the market value is the amount a willing seller would receive from a
				  willing buyer in an arms length exchange of similar property at or near the
				  location of the property being traded.
d.
				  R.S.
				  47:315 and
				  R.S.
				  47:337.34 allow the total of sales prices of
				  all items of tangible personal property subject to the tax to be reduced by the
				  selling price of any article of property returned to the seller in such manner
				  as to cancel the transaction. Repossessions of property sold on the installment
				  basis because of failure by the purchaser to make agreed installment payments
				  do not constitute a return of merchandise allowable as a deduction from gross
				  sales and the sales price for the subsequent sale of repossessed property is
				  fully taxable and must be included in gross sales.
e.
i. For sales of certain property specifically exempted from
				  all or a part of the state sales or use tax, see
				  R.S.
				  47:301(10) with respect to
				  isolated or occasional sales made by a person not engaged in the business of
				  making such sales,
				  R.S.
				  47:305 with respect to the sales of
				  livestock, poultry and other farm products by the producer and the sales of
				  agricultural products as a raw material for further processing before the sale
				  at retail to the ultimate consumer,
				  R.S.
				  47:305(D) and
				  R.S.
				  47:305.1 through
				  R.S.
				  47:305.52 for various other exemptions.
ii. For purposes of local sales or use tax, only those
				  exemptions referenced in
				  R.S.
				  47:337.9,
				  R.S.
				  47:337.10, and
				  R.S.
				  47:337.11 of the Uniform Local Sales Tax Code
				  will apply.
Hotel
a. The term
hotel
has been defined under R.S
				  47:301(6) to be somewhat more restrictive than normally construed relative to
				  the size of the establishment. Those establishments engaged in the business of
				  furnishing sleeping rooms, cottages or cabins to transient guests that consist
				  of six such accommodations at a single business location meet the statutory
				  definition. If an establishment has fewer than six sleeping rooms, cottages or
				  cabins at a single business location for transient guests, the establishment is
				  not a hotel for purposes of state and local sales or use tax . The statutory
				  definition of
hotel
excludes facilities with fewer than the
				  specified number of accommodations from collection of state and local sales or
				  use tax.
b.
i. In determining whether an establishment furnishes hotel
				  services to transient guests, it is determined that a guest who transacts for
				  the services of a hotel, regardless of the length of time that the hotel
				  services are used, is considered a transient guest and the transaction is
				  subject to sales tax. Where a hotel provides permanent residences to permanent
				  occupants, the transaction is not subject to state and local sales or use tax .
				  For the transaction to be considered a rental as a permanent residence to
				  permanent occupants, the physical properties of the space must provide the
				  basic elements of a home, including full-sized and integrated kitchen
				  appliances and facilities. Additionally, the occupant must use the facilities
				  of the hotel as a home with the intent to permanently remain. When all
				  conditions of the above two standards are met, the occupant may be considered
				  non-transient for the purposes of the state and local sales or use tax . A
				  lease with a hotel for a period of not less than one year will be considered as
				  evidence in support of permanent residency status, when the area rented
				  contained the required physical properties of the hotel accommodations at the
				  beginning of the lease. Proof that hotel rental contained the requisite
				  physical properties of the hotel accommodations within a unit continuously
				  rented by one person or family for a period greater than one year will be
				  considered as evidence in support of permanent residency status. The department
				  may require additional evidentiary support of claims of non-transient status.
ii. For the purposes of state and local sales and use tax
				  collections under
				  R.S.
				  47:301 et seq ., a guest of a hotel is a
				  natural person.
Lease or Rental
-
a. General. The lease or rental of tangible personal property
				  for a consideration in Louisiana is a transaction that is subject to the sales
				  or use tax. The term
lease or rental
means the grant to
				  another of the right to use and possess tangible personal property for a period
				  of time and for a consideration without the transfer of title to the property.
				  In a lease transaction, the lessee obtains possession or use of the tangible
				  personal property, so that the lessee has enjoyment of the property during a
				  certain time period. Re-leases or sub-leases and re-rentals or sub-rentals are
				  also considered as leases or rentals.
b. Statutory Exclusions. Some arrangements or agreements for
				  the use of tangible personal property are specifically excluded in
				  R.S. 47:301(7) (b) through
				  (h) from the definition of
lease or
				  rental
. The types of arrangements or agreements that are not defined
				  as leases or rentals are:
i. the lease or rental for re-lease or re-rental of property
				  to be used in connection with the operating, drilling, completion, or reworking
				  of oil, gas, sulfur, or other mineral wells. The lease or rental for re-lease
				  or re-rental of casing tools, pipe, drill pipe, tubing, compressors, tanks,
				  pumps, power units, and other drilling or related equipment qualifies for
				  exclusion if the property is to be used for one of the specified purposes. The
				  re-lease or re-rental to the ultimate user is not exempt;
ii. the lease or rental of property to be used in the
				  performance of contracts with the United States Navy for the construction or
				  overhaul of U.S. Naval vessels;
iii. the lease or rental of airplanes or airplane equipment
				  by commuter airlines domiciled in Louisiana;
iv. the lease or rental of items that are reasonably
				  necessary for the operation of free hospitals in Louisiana;
v. the lease or rental of certain limited items of
				  educational materials for classroom instruction by approved private and
				  parochial elementary and secondary schools;
vi. the lease or rental by Boys State of Louisiana, Inc., and
				  Girls State of Louisiana, Inc., of materials for use by those organizations in
				  their educational and public service programs for youth; and
vii. the lease or rental of motor vehicles by motor vehicle
				  dealers and manufacturers for use in furnishing to customers in the performance
				  of dealers' or manufacturers' warranty obligations or when the applicable
				  warranty has lapsed and the leased or rented motor vehicle is provided at no
				  charge;
viii. the lease or rental of machinery and equipment used
				  predominantly and directly in the process of manufacturing tangible personal
				  property for sale or used directly in the production, processing, and storing
				  of food, fiber, or timber for sale. The meanings of
manufacturing
,
used predominantly
, and
used directly
provided in LAC 61:I.4301.C.
Cost
				  Price
.h apply. This exclusion applies to state sales or use tax and
				  local sales or use taxes if the political subdivision has adopted this
				  exclusion by ordinance.
c. Transactions involving both the providing of tangible
				  personal property and the performance of a service.
i. A lease or rental does not include providing tangible
				  personal property with an operator who provides some additional service for a
				  fixed or indeterminate period of time when the essence of the transaction is
				  the performance of a service. The essence of the transaction is to provide a
				  service when obtaining the tangible personal property is not an end in and of
				  itself but rather furnishes the mechanism through which a service is
				  provided.
ii. In order to determine the essence of a transaction
				  involving both the performance of a service and the providing of tangible
				  personal property, the facts and circumstances of each transaction must be
				  examined. The following factors suggest, but are not necessarily conclusive,
				  that the essence of the transaction is for the performance of a service:
(a). in order for the tangible personal property to perform
				  as designed, the owner's operator maintains control over the property. This
				  level of control by the owner's operator involves more than maintaining,
				  inspecting, or setting-up the property;
(b). the contract between the owner of the property and the
				  person receiving the services and property provides for the performance of a
				  specific job that requires services for a certain number of hours or until
				  completion of a specific job;
(c). the performance of the job using the tangible personal
				  property is conducted in a manner determined by the owner of the
				  property;
(d). the owner of the tangible personal property is
				  responsible for choosing the particular piece of property to be used in the
				  transaction; or
(e). the owner of the tangible personal property has a
				  standard business practice of not allowing customers to rent the property
				  separately from the services provided.
d. Revenue Sharing Arrangements. Agreements, joint ventures,
				  arrangements, or partnerships between exhibitors (movie theater operators) and
				  film distributors place significant restrictions on the use of the movies and
				  on the proceeds from the use of the movies. These agreements are more in the
				  nature of revenue sharing agreements and would not qualify as leases or rentals
				  because of the restrictions placed on the party using the tangible personal
				  property. An example of this arrangement would be an agreement between an
				  exhibitor and a film distributor that not only stipulates that the proceeds
				  from the showing of the film are to be shared, but also specifies the amount to
				  be charged to the movie patron, the number of and/or the time of showings, or
				  the types or sizes of the facilities where the film is shown.
Local Sales or Use Tax
-a sales or use tax
				  imposed by a political subdivision whose boundaries are not coterminous with
				  those of the state under the constitution or laws of the state authorizing the
				  imposition of a sales and use tax.
Person
-
a. The term
person
includes:
i. natural persons; and
ii. artificial persons, including, but not limited to,
				  corporations, limited liability companies, estates, trusts, business trusts,
				  syndicates, cities and parishes, parishes, municipalities, this state, any
				  district or political subdivision, department or division thereof, any board,
				  agency, or other instrumentality thereof, acting unilaterally or as a group or
				  combination, as well as receivers, referees in bankruptcy, agricultural
				  associations, labor unions, firms, copartnerships, partnerships in commendam,
				  registered limited liability partnerships, joint ventures, associations,
				  singularly or in the plural, who have the legal right or duty, whether
				  explicit, implied or assumed, to perform any of the transactions described in
				  this Chapter.
b. A natural or artificial person's classification as exempt
				  under any other tax statute has no effect on that person's status under the
				  sales tax law. For example, a religious, charitable, educational, scientific,
				  civic, social or fraternal organization, including hospitals and similar
				  institutions, may be statutorily exempted from other taxes but remain
				  classified as persons for sales tax purposes.
c.R.S.
				  47:301(8) provides
				  exclusions from the definition of person for purchases made by certain
				  entities. Although these entities are not responsible for paying sales and use
				  taxes on some or all of their purchases, they must collect and remit sales tax
				  on their taxable sales transactions.
i. The two entities granted exclusions from paying state and
				  local sales and use tax on all of their purchases are:
(a). the state of Louisiana, its parishes, its
				  municipalities, its special districts, its political subdivisions, and any
				  other agencies, boards, commissions, or instrumentalities of the state or its
				  political subdivisions;
(b). the Society of the Little Sisters of the Poor. Before
				  claiming exemptions, the Society must obtain a certificate of authorization
				  from the Sales Tax Division of the Department of Revenue.
ii. The two entities granted exclusions from paying sales and
				  use tax on some of their purchases are:
(a). regionally accredited independent institutions of higher
				  education that are members of the Louisiana Association of Independent Colleges
				  and Universities. Purchases, leases, or rentals of tangible personal property
				  or purchases of taxable services by these institutions that are directly
				  related to the educational missions of eligible institutions are excluded from
				  state sales or use tax . Purchases, leases, and rentals directly related to the
				  educational mission of the eligible institution are interpreted broadly to
				  include those transactions required to construct, maintain, or supply
				  classrooms, libraries, laboratories, dormitories, athletic facilities, and
				  administrative facilities. Examples include purchases of supplies, equipment,
				  utilities, leases or rentals of equipment, and repair services to university
				  property;
(b). churches and synagogues exempt under Internal Revenue
				  Code Section 501(c)(3) are excluded from paying state and local sales and use
				  tax on purchases of bibles, songbooks, or literature used for religious
				  instruction classes. Eligible institutions must obtain certificates of
				  authorization from the Taxpayer Services Division of the Department of Revenue.
d. The exclusion from the definition of person is granted
				  only for purchases made by these entities on their own behalf. Representatives
				  of these entities making purchases for the entity may also be excluded from the
				  definition of person when their purchases are deemed the equivalent of an
				  acquisition by the entity itself. The most common examples of representatives
				  purchasing on behalf of these entities are:
i. mandataries (agents) purchasing materials or leasing or
				  renting equipment for immovable property construction contracts; and
ii. employees purchasing lodging services while traveling on
				  official business of the entity.
e. The following elements establish an immovable property
				  contractor's purchases as the legal equivalent of a
				  R.S.
				  47:301(8) entity's purchases
				  so as to exclude the transactions from sales and use tax. Additionally, due to
				  the federal government's immunity from state taxation under The Supremacy
				  Clause, U.S. Const. Art. VI, §2, federal contractors satisfying the following
				  criteria are also entitled to the exclusion from the definition of perso n. The
				  following criteria assume that the
				  R.S.
				  47:301(8) entity is an
				  immovable property contractor with an agency agreement with a government
				  department or agency.
i. The government department or agency must acquire title to
				  the property at the time of purchase. Except as otherwise provided in the
				  contract between the parties, the risk of loss must be with the governmental
				  entity.
ii. There must be a signed agreement authorizing the
				  contractor to act as purchasing agent for the entity. The department's form,
				  Designation of Construction Contractor as Agent of a Governmental Entity, may
				  be used for this purpose, or a custom agreement may be substituted if it
				  includes all terms and conditions listed in the form prepared by the
				  department. The form is available at any department office and through the
				  department's web site at: www.rev.state.la.us. Copies of the signed agreement
				  must be made available to tax authorities and vendors upon request. Purchases
				  by the designated agent will be recognized as those of the government entity if
				  all parties to the contract strictly follow the terms of the agreement.
f. The following elements establish when the renting of a
				  hotel room to an employee of a
				  R.S.
				  47:301(8) entity is legally
				  equivalent to the entity's purchase of the service. Additionally, due to the
				  federal government's immunity from state taxation under The Supremacy Clause,
				  U.S. Const. Art. VI, §2, federal employees are also entitled to the exclusion
				  from the definition of person when renting hotel rooms in the state. Since most
				  purchases of lodging services for persons excluded by
				  R.S.
				  47:301(8) are made by
				  government employees, the following criteria are drafted from the perspective
				  of those entities.
i. Renting a hotel room to an employee of the United States
				  government, the state of Louisiana, or a political subdivision of the state of
				  Louisiana who is traveling on official business is considered a sale of a
				  service to the government employer regardless of the form of payment to the
				  hotel, provided the lodging services are obtained by the employee at the
				  direction of the employer and accounted to and reimbursed by the government
				  agency.
ii. The exclusion must be documented in one of the following
				  ways:
(a). with a copy of the employee's written travel orders
				  certifying that the government employer will reimburse the actual lodging
				  expenses incurred. The travel orders must be on government letterhead or forms
				  and signed by an authorized representative of the government entity other than
				  the employee engaging the hotel services. The orders must state that the
				  employee is authorized to secure a room for a specific time period at a
				  specific hotel or at a hotel within a defined travel area;
(b). if written travel orders are unavailable or if the
				  travel orders are incomplete or insufficient to satisfy all of the requirements
				  in §4301. C
Person
.f.ii.(a), an exemption certificate signed
				  by the employee and the authorized agent of the governmental agency other than
				  the employee will certify the transaction's exempt status. The hotel can accept
				  the department's certificate entitled Certificate of Governmental Exemption
				  from the Payment of Hotel Lodging Taxes or one used by federal agencies,
				  provided the form states that the employee's expenses are reimbursed by the
				  employer in the actual amount incurred.
iii. Hotels must retain this documentation to support a sales
				  tax deduction for room rentals to government employees on official business.
				  Failure to do so will cause the deduction to be disallowed unless the hotel can
				  provide competent independent evidence to certify the exemption's validity. The
				  exemption will also be disallowed if it is determined that the documentation
				  was obtained fraudulently or that the hotel knew the documentation was invalid
				  when the employee presented it.
iv. This exclusion is not allowed on hotel room charges
				  incurred by other nations, other states and their political subdivisions, or
				  their employees.
Political Subdivision
-as provided in Article
				  VI, Section 44(2) of the Constitution of Louisiana, a
political
				  subdivision
means a parish, municipality, and any other unit of local
				  government, including a school board and a special district, authorized by law
				  to perform governmental functions.
Purchaser
-
a.
Purchaser
is defined to include not only
				  persons who acquire tangible personal property in a transaction subject to
				  state and local sales or use tax, but also any person who acquires or receives
				  the privilege of using any tangible personal property, as in the case of
				  property rented from others, or any person who receives services of a nature
				  subject to tax.
b. The term is construed to complement
dealer
as defined in
				  R.S.
				  47:301(4) and the collector
				  may proceed against either for any tax due.
Retail Sale or Sale at Retail
a. The major tax levied by state and local sales or use tax
				  is imposed upon retail sales or sales at retail which contemplates the taxing
				  of any transaction by which title to tangible personal property is transferred
				  for a consideration, whether paid in cash or otherwise, to a person for any
				  purpose other than for resale.
b. While specific exclusions are provided in
				  R.S.
				  47:301(10) with respect to
				  sales of materials for further processing into articles for resale and with
				  respect to casual, isolated, or occasional sales, and exemptions are provided
				  for sales of particular items or classes of property by
				  R.S.
				  47:305 and
				  R.S.
				  47:305.1 through
				  R.S.
				  47:305.52, the intent of the law is to
				  classify every sale made to the final user or consumer for any imaginable
				  purpose, other than for resale, as a retail sale or a sale at retail . For
				  purposes of
				  R.S.
				  47:301(10), whether a
				  transaction is exempt from taxation by statute, jurisprudence, or by
				  constitution has no bearing on classification of the transaction.
c. Sales made by and to vending machine operators are subject
				  to tax as follows.
i. For purposes of state sales or use tax, sales of tangible
				  personal property to operators of coin-operated vending machines are sales at
				  retail . Thus, dealers who resell tangible personal property through
				  coin-operated vending machines are treated as consumers of the articles of
				  property they purchase for resale by vending machine and are liable for sales
				  or use tax on their acquisition cost of the articles. The resale of the
				  property through vending machines is not a retail sale and is not subject to
				  state sales or use tax.
ii. For purposes of local sales or use tax, the sale of
				  property through vending machines is a retail sale subject to sales tax.
d. Sales of materials for further processing into articles of
				  tangible personal property for subsequent sale at retail do not constitute
				  retail sales. This exemption does not cover materials which are used in any
				  process by which tangible personal property is produced, but only those
				  materials which themselves are further processed into tangible personal
				  property. Whether materials are further processed or simply used in the
				  processing activity will depend entirely upon an analysis of the end product.
				  Although any particular materials may be fully used, consumed, absorbed,
				  dissipated or otherwise completely disappear during processing, if it does not
				  become a recognizable and identifiable component which is of some benefit to
				  the end product, it is not exempt under this provision. The fact that a
				  material remained as a recognizable component of an end product by accident
				  because the cost of removal from the end product was prohibitive or for any
				  other reason, if it does not benefit the property by its presence, it was not
				  material for further processing and the sale is not exempt under this
				  provision.
e. It is not the intention of state and local sales or use
				  tax law to impose a tax on an isolated or occasional sale, frequently termed a
casual sale
, except with respect to the sale of motor
				  vehicles, which are specifically covered by
				  R.S.
				  47:303(B) and
				  R.S.
				  47:337.15(B)(2). The primary
				  consideration in determining whether a sale meets exemption requirements is
				  whether the seller is in the business, or holds himself to be in the business,
				  of selling merchandise or tangible personal property of similar nature, and not
				  solely upon the frequency of the transactions. As examples, a firm engaged in
				  the retail grocery business who sold a cash register originally acquired for
				  their own use is not engaged in the business of selling cash registers, and the
				  sale would be exempt; an office machine firm who sold carpeting acquired for
				  their own use is not in the business of selling carpets, and the sale would be
				  exempt; the periodic sale of articles by auction to recover storage, repair or
				  labor liens unpaid by the owner of the property are exempt, provided the person
				  forcing the sale does not hold himself out to be in the business of selling
				  such merchandise. If the person causing the sale of property by auction takes
				  title to the property prior to sale, it will be presumed that he has become
				  engaged in the business and the sales will be taxable.
f. For state and local sales or use tax purposes,
				  R.S.
				  47:301(10)(o) excludes the
				  sale or purchase of equipment used in fire fighting by bona fide volunteer fire
				  departments from the definition of
retail sale or sale at
				  retail
. This applies to all equipment and special apparel necessary
				  for fighting fires including communications systems, rubber suits, boots,
				  helmets, axes, ladders, buckets, and the furnishings of a firehouse necessary
				  for its operation such as sleeping and cooking facilities. Items purchased
				  solely for the entertainment or recreation of volunteer firemen and meals or
				  services furnished to a firehouse do not qualify for exclusion.
Retailer
-
a. The term
retailer
as used in state and
				  local sales or use tax law not only covers persons engaged in the
business
(as defined in
				  R.S.
				  47:301(1) and LAC
				  61:I.4301.C.
Business
) of making retail sales or sales at
				  retail (as defined in
				  R.S.
				  47:301(10) and LAC
				  61:I.4301.C.
Retail Sale
or
Sale at Retail
,
				  but also includes any person engaged in the business of transferring title to
				  tangible personal property for a consideration to others for their use or
				  consumption, or for distribution or for storage to be used or consumed within a
				  taxing jurisdiction.
b. The term does not include persons who make isolated or
				  occasional sales and who do not hold themselves out to be in the business of
				  selling the particular kind or type of property involved in a casual
				  sale.
Sale
-
a.R.S.
				  47:301(12) defines a
sale
as receiving or giving consideration in return for:
i. transferring title or ownership of tangible personal
				  property;
ii. transferring possession of tangible personal property
				  when the seller retains legal title to the property as security to ensure full
				  payment of the selling price;
iii. fabricating tangible personal property for consumers who
				  furnish, either directly or indirectly, the materials used in fabrication work;
				  and
iv. furnishing, preparing or serving tangible personal
				  property that is consumed on the premises of the seller.
b. Fabricating or fabrication, for sales tax purposes, means
				  to make, build, create, produce, or assemble components of tangible personal
				  property, or to make tangible personal property work in a new or different
				  manner.
c. A sale includes, but is not limited to, transactions
				  where:
i. tangible personal property is transferred on a conditional
				  basis (i.e., the customer has the option of returning the property and
				  obtaining a refund of the sales price); and
ii. payment is made in a form other than money, as in a
				  barter agreement, an exchange of property, or a promissory note.
d. When tangible personal property, like food, is served on
				  the vendor's premises, the vendor is required to charge sales tax for:
i. the total price of preparing and serving the food even if
				  these charges are billed separately; and
ii. tips and gratuities, if the vendor fails to separately
				  list these charges on the bill, or if any portion of these amounts (except
				  reimbursement for credit card processing fees) is retained by the vendor. Sales
				  tax is not charged on tips and gratuities if they are separately stated and the
				  total amounts collected are distributed to the employees that prepare and serve
				  the food.
e. When tangible personal property, like food, is served at
				  the customer's premises, sales tax is not charged for preparing and serving the
				  food, provided these charges are separately stated from the
sale
of the food.
Sales of Services
-
a. State and local sales or use tax law basically treats the
				  furnishing of services and permission to use certain kinds of property the same
				  as the sale of merchandise, and the law classifies those items as sales of
				  services . Only those services specifically itemized under the provisions of
				  R.S.
				  47:301(14)(a)-(g), are
				  subject to state and local sales or use tax law. Telecommunications services
				  defined in
				  R.S.
				  47:301(14)(i) are subject
				  only to state sales or use tax law.
b. The entire amount charged to a customer for any of the
				  taxable items listed in
				  R.S.
				  47:301(14)(a)-(g) is taxable
				  if billed in a lump sum. Although the law provides many exemptions, unless they
				  are specifically identified and segregated in billings to customers, the entire
				  charge will be subject to the tax. Whether the consideration paid for sales of
				  services is in the form of cash or otherwise is immaterial.
c.R.S.
				  47:301(14)(a) includes the
				  furnishing of sleeping rooms, cottages, or cabins by hotels as sales of
				  services .
Hotels
have been defined in
				  R.S.
				  47:301(6) and the regulation
				  issued under LAC 61:I.4301.C.
Hotel
. If an establishment meets
				  the definition of a
hotel
under these laws, all charges for
				  the furnishing of rooms in that establishment, other than to permanent
				  full-time occupants, constitute sales of services.
d. Under the provisoes of
				  R.S.
				  47:301(14)(b) charges for
				  admissions to places of amusement, entertainment, recreation, or athletic
				  events, except those sponsored by schools, colleges, or universities, are
				  classified as sales of services and as such are taxable. Note that only those
				  events which are sponsored by schools, colleges, and universities are exempt.
				  The same admissions charged by charitable, religious, social and other
				  organizations are taxable, unless specifically exempted under some other
				  provision.
i. Fees or other consideration and dues paid for the
				  privilege of obtaining access to clubs are similarly classified as sales of
				  services under this particular section of the law. Such dues, fees, or other
				  consideration are taxable even though some personal services may be rendered by
				  the owner of the club after access thereto has been obtained. Dues, fees, or
				  other consideration paid for the privilege of having access to places of
				  amusement, entertainment, athletic, or recreational facilities are also
				  included in the definition of sales of service.
ii. The cost of stock or certificates of membership required
				  to be purchased prior to becoming a member of a club is not included in sales
				  of services if the club member has the prerogative of disposing of the stock or
				  certificate of membership when he ceases to utilize the club or facilities. If
				  a member is required to surrender his stock or certificate of membership upon
				  leaving a club, then the purchase price is considered nothing more than a fee
				  for his participation and is classified as sales of services.
e.R.S.
				  47:301(14)(c) includes the
				  furnishing of storage or parking privileges by auto hotels or parking lots as
				  taxable sales of services. Parking lots are held to include facilities for the
				  parking of transient trailers. For purposes of this determination, trailers
				  will be presumed to be transient unless the parking space is engaged for a
				  period in excess of 30 consecutive days at any one time and provided the
				  trailers have not been removed from their wheels and placed on permanent
				  foundation. Some hotels advertise free parking facilities for their guests and
				  it is presumed that the room rate charged the guests is sufficiently high to
				  cover the cost of parking, in which event the charge would be taxed under the
				  provisions of R. S. 47:301(14)(a). This charge is taxable under R. S.
				  47:301(14)(a) if included in the room rate or under
				  R.S.
				  47:301(14)(c) if billed
				  separately.
f.R.S.
				  47:301(14)(d) provides that
				  the furnishing of printing or overprinting, lithograph and multilith, blue
				  printing, photostating, or other similar services of reproducing written or
				  graphic matter, shall be included under sales of services . Generally, the
				  activities of persons engaged in this type of business fall within two basic
				  categories. The first is the production of tangible personal property, whereby
				  raw materials are converted into items such as circulars, books, envelopes,
				  folders, posters and other types of merchandise which are sold directly to
				  their customer. These transactions fall within the definition of
sales
at
				  R.S.
				  47:301(12) and are taxable
				  as sales of tangible personal property. The materials used by the printer in
				  the production of the end product are covered by the exemption provided in
				  R.S.
				  47:301(10), and are exempt
				  to the printer at the time of purchase by him. In addition,
				  R.S.
				  47:305.44 and
				  R.S.
				  47:337.9(D)(20) provide an
				  exemption for raw materials and certain consumables which are consumed by a
				  printer. The second basic business activity engaged in by printers which
				  subject them to the provisions of the sales tax law is the furnishing of
				  services. This classification covers printing done on materials furnished by
				  the printer's customers which are returned to the customer upon completion of
				  the printer's service. In cases where plates, mats, photographs, or other
				  similar items are used in the performance of either a pure service as intended
				  by
				  R.S.
				  47:301(14)(d) or whether in
				  the production of tangible personal property, if those materials are delivered
				  to the printer's customer and a charge therefore is made, this transaction
				  constitutes a sale of tangible personal property and is taxable. In cases where
				  the materials are delivered to the customer and no charge is made, it is
				  presumed that the charge for services or the charge for other printed matter
				  delivered to the customer is sufficiently high to include the billing for those
				  materials.
g. Revised Statute 47:301(14)(e) defines laundry, cleaning,
				  pressing, and dyeing services; including the cleaning and renovation of
				  clothing, furs, furniture, carpets, and rugs; as taxable services.
i.
Sales of services
under
				  R.S.
				  47:301(14)(e) includes
				  cleaning, pressing, and dyeing objects made primarily of materials like fabric,
				  fur, leather, or cloth by cleaners, laundries, washaterias, and other cleaning
				  establishments. Examples of taxable services include cleaning the following
				  items:
(a). clothing;
(b). furniture;
(c). carpets;
(d). linens;
(e). pillows; and
(f). draperies.
ii. Cleaning objects made primarily of metal, wood, plastic,
				  glass, or other nonfabric material are not subject to tax under
				  R.S.
				  47:301(14)(e). Examples of
				  services that are not taxable include cleaning the following items:
(a). automobiles;
(b). barges;
(c). pipes;
(d). tanks; and
(e). jewelry.
iii. Cleaning services performed to restore tangible personal
				  property to a proper working condition, as when cleaning the inner workings of
				  a watch or the fuel injectors in an engine, are considered repairs under
				  R.S.
				  47:301(14)(g) and subject to
				  tax.
iv. Taxable cleaning services under
				  R.S.
				  47:301(14)(e) do not include
				  transactions when customers personally operate cleaning equipment for a fee. An
				  example of this would be patrons' use of commercial coin-operated washing
				  machines at a laundromat. However, taxable leases or rentals exist when
				  customers acquire possession or use of the cleaning equipment in accordance
				  with
				  R.S.
				  47:301(7). An example of
				  this would be the rental of a carpet shampooer for use at home.
v. Revised Statute 47:301(14)(e) also defines the furnishing
				  of storage space for clothing, furs, and rugs as
sales of
				  services
. All charges pertaining to the furnishing of storage space
				  for these items are included in the taxable amount regardless of whether the
				  operator is engaged solely in furnishing storage space or the activity is
				  incidental to another
business
.
h.R.S.
				  47:301(14)(f) defines the
				  furnishing of cold storage space and preparing tangible personal property for
				  cold storage as services subject to sales and use tax.
i.
Cold Storage Space
-a space that is
				  artificially frozen or refrigerated to prevent the stored items from perishing
				  or deteriorating.
ii.
Furnishing of Cold Storage Space
-
				  transactions in which cold storage space is provided to customers for a
				  consideration when the owner or operator of the cold storage space designates
				  specific areas or volumes of space for the customers' use. The customers are
				  required to compensate for the space allotted regardless of the degree of use
				  of the space.
iii. Transactions that are not considered the furnishing of
				  cold storage space for sales tax purposes include:
(a). storage space in air-conditioned warehouses or
				  mini-storage units that are cooled to a normal room temperature level;
				  and
(b) storage space in facilities where the possession of
				  customers' property is transferred to the owner or operator of a cold storage
				  space for retention and safekeeping as in a bailment or deposit
				  transaction.
iv.
Preparing Tangible Personal Property for Cold
				  Storage
-all activities necessary to prepare the product to be stored
				  for cold storage. This includes but is not limited to packaging, wrapping,
				  containerizing, cleaning or washing.
(a). Preparing tangible personal property for cold storage is
				  included in sales of services only if it is incidental to the operation of cold
				  storage facilities.
(b). Separately stated charges for handling the property to
				  be placed in or removed from the facility are not subject to the sales tax. If
				  handling charges are included in the price for the furnishing of cold storage
				  space or preparing tangible personal property for cold storage, tax is due on
				  the entire amount.
i.R.S.
				  47:301(14)(g)(i) includes as
				  sales of services the furnishing of repairs to tangible personal property. By
				  clear illustration in the statute, both repair and routine servicing of all
				  kinds of tangible personal property are included as taxable services. For state
				  sales or use tax purposes only, repairs performed within Louisiana on tangible
				  personal property are taxable sales of services except for repaired property
				  which is returned to a customer located in another state by common carrier or
				  by the repair dealer's vehicle. The charge for repairs to property returned to
				  a customer's location in the offshore area are taxable regardless of the mode
				  of transportation. Repair services performed outside the state of Louisiana to
				  property which is normally or permanently located here except for its removal
				  for repair, would not be taxable for state sales or use tax purposes. However,
				  if property is shipped outside the state for repairs, any additions made
				  thereto may subject the property to the use tax imposed by
				  R.S.
				  47:302(A)(2) upon its return
				  to the state. If personnel normally attached to a repair installation within
				  the state go outside the state, for instance, to a location offshore which is
				  clearly outside the limits of the state of Louisiana to perform repairs, those
				  repairs are not taxable.
i. Prepaid repairs such as maintenance contracts and other
				  similar transactions are included in sales of services, if the tangible
				  personal property to which they apply is located in Louisiana and the agreement
				  calls for any necessary repairs to be performed at the location of the
				  property.
ii.R.S.
				  47:301(14)(g)(ii) provides
				  that tangible personal property, for purposes of sales of services, shall
				  include machinery, appliances, and equipment which have been declared immovable
				  under the provisions of
				  Article
				  467 of the Louisiana Civil Code . It also
				  includes things incorporate into land, buildings, or other construction, which
				  have been separated from the land, buildings, or other construction. Similarly,
				  the component parts of buildings and other construction, as defined by
				  Article
				  466 of the Louisiana Civil Code, are movable
				  property when they are separated from the building or other construction, and
				  repairs thereto are includable in taxable sales of services.
Sales Price
-
a.
				  R.S.
				  47:301(13)(a) defines
sales price
as the total amount, including cash, credit,
				  property, or services, that is received or paid for the sale of tangible
				  personal property. Any part of the sales price that is related to costs
				  incurred by the vendor to bring the product to market or make the product
				  available to customers becomes part of the tax base and is subject to sales tax
				  even if a separate charge is made on the invoice.
i. Costs included in the sales price are:
(a). materials used;
(b). resale inventory;
(c). freight or shipping costs from the supplier to the
				  vendor, or from the vendor to the customer where the transportation by the
				  vendor is an essential or necessary element of the agreement of sale, as would
				  normally be true in transactions for the sale and delivery of ready-mixed
				  concrete or similar products:
(i). these transportation expenses are incurred by a seller
				  in acquiring tangible personal property for sale or in transporting tangible
				  personal property to the place of sale and form part of the seller's overhead;
				  and
(ii). cannot be excluded from the taxable sales price even
				  when separately stated to the purchaser;
(d). utilities;
(e). insurance;
(f). financing for business operations;
(g). labor;
(h). overhead;
(i). service costs:
(i). handling charges are considered service costs;
				  and
(ii). are distinguishable from charges for transportation
				  under the definition of sales price and related court decisions;
(j). costs incurred by a vendor that are charged for the
				  procurement, or purchasing, of tangible personal property on behalf of the
				  customer; and
(k). excise taxes imposed on the producer, processor,
				  manufacturer or importer, as these taxes become a part of the dealer's
				  cost.
ii. The following are examples of charges not considered part
				  of the sales price because they are not related to costs incurred by the vendor
				  to bring the product to market:
(a). freight, shipping, or delivery charges from the vendor
				  or the vendor's agent directly to the customer after the sale has taken place
				  when the following two conditions are met:
(i). the seller of the tangible personal property separately
				  states the charges for the actual delivery or transportation of the sold
				  property from the place of the sale to the destination designated by the
				  purchaser;
(ii). on the invoices for the sale and transportation of
				  tangible personal property, the place of the sale of the property, and the fact
				  that the transportation is rendered subsequent to the sale and purchase and for
				  the buyer's account, must be clearly determinable;
(b). federal retailers' excise tax that must be collected
				  from the consumer or user:
(i). if these taxes are billed to the user or customer
				  separately, they should be excluded from the tax base;
(ii). however, if the retailers' excise tax is not billed
				  separately, the total selling price, including the excise tax, is
				  taxable.
iii.R.S.
				  47:301(13)(a) specifically
				  excludes the following charges from the definition of
sales
				  price
provided they are separately stated:
(a). the market value of an item traded in on the sale, as
				  specified in
				  R.S.
				  47:301(13)(a):
(i). the trade-in item must be one the vendor would normally
				  accept in the course of business and must be similar to the item being
				  purchased. An example of this is trading in a motorcycle on the purchase of a
				  pickup truck;
(ii). exchanging an item that is not similar to the item
				  being purchased will be treated as a barter or exchange agreement as described
				  in
				  R.S.
				  47:301(12). An example of
				  this would be the owner of a clothing store providing suits to the owner of an
				  appliance store in return for a dishwasher. In this instance, each selling
				  party must report the transaction on his sales tax return;
(iii). the transfer of ownership of the trade-in must occur
				  simultaneously with the sales transaction;
(iv). the trade-in value must be established prior to the
				  sale;
(b). interest charges not exceeding the legal interest rate
				  to finance the sale;
(c). service charges for financing, up to 6 percent of the
				  amount financed;
(d). cash discounts allowed by the vendor if the customer
				  takes advantage of the discount;
(e). labor to install the tangible personal property;
(f). charges by a seller for installing property that he has
				  sold:
(i). installing includes the charge by the seller of movable
				  property for setting up that property on or the attachment of that property to
				  other movable or immovable property that is already owned or possessed by the
				  purchaser;
(ii). examples of the types of installation charges that are
				  excludable from sales price under this provision are the charges for setting up
				  an appliance in a home or business, or the first-time attachment of a new
				  mobile telephone, new radio, or new speakers to a customer-owned vehicle that
				  previously was without such property;
(iii). exclusion is not intended, however, for the charges
				  for removal and replacement of worn or malfunctioning components of movables,
				  such as the removal and replacement of tires and batteries in vehicles. These
				  types of services constitute repairs to movables that are defined in
				  R.S.
				  47:301(14)(g) as taxable
				  "sales of services";
(g). charges to set up the property on the taxpayer's
				  premises;
(h). charges for remodeling or repairing the property sold
				  if:
(i). these services are provided prior to the sale;
(ii). the vendor sends the property to another dealer or
				  service provider for remodeling or repair and pays sales taxes on these taxable
				  services; and
(iii). the services are separately itemized and identified in
				  the billing to the customer;
(iv). if the remodeling or repairing is performed by the
				  vendor either:
[a]. prior to the sale; or
[b]. after the sale but before the customer takes possession
				  of the item;
[c]. then these would be costs of the vendor incurred to
				  bring the product to market or make a product available to customers and would
				  become part of the tax base;
(v). any services performed after the property is in the
				  possession of the customer are taxable under
				  R.S.
				  47:301(14).
iv. In all instances where an expense is required to be
				  separately stated, the effect of combining the charge with another taxable item
				  included in the sales price will subject the entire amount to sales tax.
v.R.S.
				  47:301(13)(b) provides an
				  exclusion from sales price for the amounts of cash discounts and rebates that
				  manufacturers and vendors of new vehicles offer to purchasers of
				  vehicles.
(a). The exclusion will apply both to the discounts and
				  rebates that are based on vehicle make and model, as well as to the discounts
				  and rebates that are based on customer usage of manufacturer-issued credit
				  cards.
(b). In order for this exclusion to apply, the customer must
				  assign the discount or rebate to the selling dealer of the vehicle, so that the
				  discount or rebate results directly in a reduction of the price to be paid for
				  the vehicle.
(c). In cases where a customer accepts a rebate or discount
				  in cash, and does not assign the amount to the selling dealer as a deduction
				  from the listed retail price of the vehicle, the exclusion from sales price
				  will not apply.
vi.R.S.
				  47:301(13)(c) excludes from
				  taxable sales price the first $50,000 paid for new farm equipment used in
				  poultry production.
(a). This exclusion applies only to the price of property
				  that is identifiable at the time of sale as being for use in poultry
				  production.
(b). The exemption is available only to commercial producers
				  who sell poultry or the products of poultry in commercial quantities.
(c). The portion of the sales price of any item of commercial
				  farm equipment in excess of $50,000 will be included in the taxable sales price.
vii.R.S.
				  47:301(13)(e) excludes the
				  value of payments made directly to retail dealers by manufacturers seeking a
				  reduction in the price retail dealers charge for the manufacturers' products.
				  These payments, often called buy downs, are applied by the retail dealer to
				  the selling prices of the manufacturer's products. Retail dealers must collect
				  the tax on the discounted sales price after applying the manufacturers'
				  payments.
viii. In cases where all or a part of the purchase price of
				  tangible personal property is paid to the selling dealer by the presentation of
				  a coupon, the determination of the taxable sales price will depend on the type
				  of coupon that is presented.
(a). Manufacturer's coupons that the selling dealer accepts
				  from the customer and can be redeemed through a manufacturer or coupon agent
				  are not allowed as a reduction of the sales price . Because the retailer's
				  total compensation includes the amount paid by the customer after presenting
				  the coupon and the amount reimbursed by the manufacturer for the coupon's face
				  value, the tax is based on the actual selling price of the item before the
				  discount for the coupon.
(b). The retailer's own coupons, which the selling dealer is
				  unable to redeem through another party, provides a cash discount that can be
				  excluded from the sales price . The sales tax on a sale involving this type of
				  coupon will be computed on the price paid after an allowance for the selling
				  dealer's coupon discount.
ix.R.S.
				  47:301(13)(f) provides that
				  sales price excludes any consideration received, given, or paid for the
				  performance of funeral directing services. The term
funeral directing
				  services
is defined and further discussed at
				  R.S.
				  47:301(10)(s):
(a). no exclusion from taxation is allowed on the sale,
				  lease, or rental, of tangible personal property by funeral directors to
				  customers; or
(b) on the purchase, lease, use, consumption, distribution,
				  or storage for use of tangible personal property by funeral directors in
				  connection with their performance of professional services.
x.
				  R.S.
				  47:301(13)(k) excludes
				  machinery and equipment used predominantly and directly in the process of
				  manufacturing tangible personal property for sale or used directly in the
				  production, processing, and storing of food, fiber, or timber for sale from the
				  sales price . For purposes of sales price, the interpretations provided under
				  LAC 61:I.4301.C.
Cost Price
.h will apply. This exclusion
				  applies to state sales tax and local sales taxes if the political subdivision
				  has adopted this exclusion by ordinance. To determine sales price subject to
				  tax, this exclusion is deducted from the total amount charged to the customer
				  after allowances for trade-ins and before any exemptions provided elsewhere in
				  the law.
b.
				  R.S.
				  47:301(13)(d) provides that,
				  in the case of the sale by a manufacturer of refinery gas or other petroleum
				  byproducts that are to be used by the purchasers as other than feedstock, the
				  taxable sales price shall be the greater of:
i. the actual sales price of the byproducts; or
ii. the average monthly spot market price per thousand cubic
				  feet of natural gas delivered into pipelines in Louisiana, as reported by the
				  Natural Gas Clearing House at the time of such sale.
State Sales
or
Use Tax
-a
				  sales or use tax imposed by the state under Chapters 2, 2-A, or 2-B of Subtitle
				  II of Title 47 of the Revised Statutes of 1950, as amended, or by a political
				  subdivision of the state whose boundaries are coterminous with those of the
				  state.
Storage
-for state sales or use tax purposes
				  only, since storage for use or consumption of tangible personal property is
				  taxed under the provisions of
				  R.S.
				  47:302,
				  R.S.
				  47:321, and
				  R.S.
				  47:331, the term
storage
is
				  defined herein to exclude storage of property which will later be sold at
				  retail and taxed because of the sale. The term does not require the keeping of
				  property in a warehouse but includes the keeping or retention or stockpiling of
				  property in any manner whether indoors or out. If property has come to rest in
				  this state and will later be used or consumed here, it meets the definition of
storage
.
Tangible Personal Property
-
a.
				  R.S.
				  47:301(16)(a) defines
tangible personal property
as personal property that can be
				  seen, weighed, measured, felt, touched, or is perceptible to the senses. The
				  Louisiana Supreme Court has ruled that tangible personal property is equivalent
				  to corporeal movable property as defined in
				  Article 471 of
				  the Louisiana Civil Code. The Louisiana Civil Code describes corporeal movable
				  property as things that physically exist and normally move or can be moved from
				  one place to another. Examples of tangible personal property include but are
				  not limited to:
i. durable goods such as appliances, vehicles, and
				  furniture;
ii. consumable goods such as food, cleaning supplies, and
				  medicines;
iii. utilities such as electricity, water, and natural gas;
				  and
iv. digital or electronic products such as "canned" computer
				  software, electronic files, and "on demand" audio and video downloads.
b. The following items are specifically defined as
tangible personal property
by law:
i. for state sales or use tax purposes only, prepaid
				  telephone cards and authorization numbers; and
ii. for state and local sales or use tax purposes, work
				  products consisting of the creation, modification, updating, or licensing of
				  canned computer software.
c. Repairs of machinery, appliances, and equipment that have
				  been declared immovable under
				  Article
				  467 of the Louisiana Civil Code and things
				  that have been separated from land, buildings, or other constructions
				  permanently attached to the ground or their component parts as defined by
				  Article
				  466 of the Louisiana Civil Code are treated
				  as taxable repairs of tangible personal property under
				  R.S.
				  47:301(14)(g).
i. Things are considered separated from an immovable when
				  they are detached and repaired at a location off the customer's immediate
				  property where the immovable is located or at the repair vendor's facility,
				  even if that facility is on property owned, leased, or occupied by the
				  customer. If the thing is detached from the immovable and repaired on the
				  customer's immediate property, it is not considered separated from the
				  immovable and the repair would not be subject to tax.
ii. The customer's immediate property is the tract of land
				  that is owned, leased, or occupied by the customer where the immovable is
				  located.
iii. Tracts of land owned, leased, or occupied by the
				  customer that are separated only by a public road or right-of-way from the land
				  where the immovable is located are also considered the customer's immediate
				  property.
d. Tangible personal property does not include:
i. incorporeal property such as patents, copyrights, rights
				  of inheritance, servitudes, and other legal rights or obligations;
ii. work products presented in a tangible form that have
				  worth because of the technical or professional skills of the seller. Work
				  products are considered non-taxable technical or professional services if the
				  tangible personal property delivered to the client is insignificant in
				  comparison to the services performed and there is a distinction between the
				  value of the intangible content of the service and the tangible medium on which
				  it is transferred. These do not include items that have intrinsic value, like
				  works of art, photographs, or videos. Also, documents that are prepared or
				  reproduced without modification are considered tangible personal property.
				  Examples of sales of technical or professional services that are transmitted to
				  the customer in the form of tangible personal property include but are not
				  limited to:
(a). audience, opinion, or marketing surveys;
(b). research or study group reports;
(c).
business
plans; and
(d). investment analysis statements;
iii. property defined as immovable by the Louisiana Civil
				  Code.
e. Items specifically excluded from the definition of
tangible personal property
include:
i. stocks, bonds, notes, or other obligations or
				  securities;
ii. gold, silver, or numismatic coins of any value;
iii. platinum, gold, or silver bullion having a total value
				  of $1,000 or more;
iv. proprietary geophysical survey information or geophysical
				  data analysis furnished under a restrictive use agreement even if transferred
				  in the form of tangible personal property;
v. parts and services used in the repairs of motor vehicles
				  if all of the following conditions are met:
(a). the repair is performed by a dealer licensed by the
				  Louisiana Motor Vehicle Commission or the Louisiana Used Motor Vehicle and
				  Parts Commission;
(b). the repair is performed subsequent to the lapse of an
				  original warranty that was included in the taxable price of the vehicle by the
				  manufacturer or the seller;
(c). the repair is performed at no charge to the owner;
				  and
(d). the repair charge is not paid by an extended warranty
				  plan that was purchased separately;
vi. pharmaceuticals administered to livestock used for
				  agricultural purposes as defined by the Louisiana Department of Agriculture and
				  Forestry under LAC 7:XXIII.103; and
vii. work products of persons licensed under Title 37 of the
				  Louisiana Revised Statutes such as legal documents prepared by an attorney,
				  financial statements prepared by an accountant, and drawings and plans prepared
				  by an architect or engineer for a specific customer. However, if these items
				  are reproduced without modification, they are considered tangible personal
				  property and subject to sales or use tax.
f. Manufactured or mobile homes purchased in or delivered
				  from another state to Louisiana after June 30, 2001, are excluded from the
				  definition of
tangible personal property
for state sales or
				  use taxes. Manufactured or mobile homes purchased in or delivered from another
				  state to Louisiana after December 31, 2002, are excluded from the definition of
tangible personal property
for
local sales or use
				  tax
es when the buyer certifies the manufactured or mobile home will be
				  used as a residence.
i. For state sales taxes, the entire price paid for used
				  manufactured or mobile homes and 54 percent of the price paid for new
				  manufactured or mobile homes are excluded from the definition of
tangible personal property
and not subject to tax.
ii. For local sales taxes when the buyer certifies the
				  manufactured or mobile home will be used as a residence:
(a). after December 31, 2002, and before January 1, 2004-25
				  percent of the price paid for used manufactured or mobile homes and 13 1/2
				  percent of the price paid for new manufactured or mobile homes are excluded
				  from the definition of
tangible personal property
and not
				  subject to tax;
(b). after December 31, 2003, and before January 1, 2005-50
				  percent of the price paid for used manufactured or mobile homes and 27 percent
				  of the price paid for new manufactured or mobile homes are excluded from the
				  definition of
tangible personal property
and not subject to
				  tax;
(c). after December 31, 2004, and before January 1, 2006-75
				  percent of the price paid for used manufactured or mobile homes and 40 1/2
				  percent of the price paid for new manufactured or mobile homes are excluded
				  from the definition of
tangible personal property
and not
				  subject to tax; and
(d). after December 31, 2005-the entire price paid for used
				  manufactured or mobile homes and 54 percent of the price paid for new
				  manufactured or mobile homes are excluded from the definition of
tangible personal property
and not subject to tax.
iii. Manufactured or mobile homes are structures that are
				  transportable in one or more sections, built on a permanent chassis, designed
				  to be used as a dwelling with or without a permanent foundation when connected
				  to the required utilities, and include plumbing, heating, air-conditioning, and
				  electrical systems. The units must be either 8 body feet or more in width or 40
				  body feet or more in length in the traveling mode, or at least 320 square feet
				  when erected on site. These size requirements may be disregarded if the
				  manufacturer voluntarily certifies to the distributor or
dealer
at the time of delivery that the structure conforms to
				  all applicable federal construction and safety standards for manufactured
				  homes.
iv. Manufactured or mobile homes do not include modular homes
				  that are not built on a chassis, self-propelled recreational vehicles, or
				  travel trailers.
g. The sale or purchase of custom computer software on or
				  after July 1, 2002, and before July 1, 2005, is partially excluded, and on or
				  after July 1, 2005, completely excluded, from the definition of
tangible personal property
under
				  R.S.
				  47:301(16)(h). This
				  exclusion applies to state sales tax, the sales tax of political subdivisions
				  whose boundaries are coterminous with the state, and the sales tax of political
				  subdivisions whose boundaries are not coterminous with the state that exempt
				  custom computer software by ordinance as authorized by
				  R.S.
				  47:305.52. Custom computer software is
				  software that is specifically written for a particular customer or that adapts
				  prewritten or "canned" software to the needs of a particular customer.
i. Before July 1, 2002-purchases of prewritten or canned
				  software that are incorporated into and resold as a component of custom
				  computer software before July 1, 2002, are considered purchases of tangible
				  personal property for resale. Use tax is not due on these purchases and any
				  sales tax paid is eligible for tax credit against the tax collected on the
				  retail sale of the custom software.
ii. Phase-In Period-the sales tax exclusion for custom
				  computer software will be phased in at the rate of 25 percent per year
				  beginning on July 1, 2002. During the phase-in period, purchases of prewritten
				  or canned software that are incorporated into and resold as a component of
				  custom computer software will be considered a purchase for resale according to
				  the applicable sales tax exclusion percentage in effect at the time of sale.
				  The custom software vendor must pay sales tax on the purchase price of the
				  canned software and may claim tax credit for the percentage that is resold as
				  tangible personal property . If 75 percent of the sales price of the custom
				  computer software is taxable, the vendor is allowed a tax credit for 75 percent
				  of tax paid on the canned software purchase. Conversely, if sales tax was not
				  paid by the custom software vendor on the purchase of canned software that is
				  incorporated into custom software, use tax will be due on the percentage that
				  is not considered to be a purchase for resale. The sales tax exclusion
				  percentage will increase each year during the phase-in period and guidelines on
				  the phase in of this exclusion will be published in a revenue ruling.
iii. July 1, 2005-the purchase of prewritten or canned
				  software that is incorporated into and resold as a component of custom computer
				  software sold on or after July 1, 2005, will be considered the purchase of
				  tangible personal property for the personal use of the custom software vendor
				  and subject to sales or use tax.
h. The first purchase of digital television conversion
				  equipment by a taxpayer that holds a Federal Communications License issued
				  pursuant to  47 CFR Part 73  is excluded from the definition of
tangible
				  personal property
for state sales tax and local sales tax if the local
				  authority adopts this exemption by ordinance.
i.
Digital Television Conversion Equipment
-
				  items listed in
				  R.S.
				  47:301(16)(i).
ii.
First Purchase
-the first purchase of
				  each item from the categories of digital television conversion equipment listed
				  in
				  R.S.
				  47:301(16)(i).
iii. License holders may obtain a credit for sales taxes paid
				  on the first purchase of digital television conversion equipment made after
				  January 1, 1999, and before June 25, 2002, by submitting a request on forms
				  prescribed by the Department of Revenue. Guidelines for claiming the credit
				  will be published in a revenue ruling.
iv. License holders may obtain an exemption certificate from
				  the Department of Revenue and make first purchases of qualifying digital
				  equipment on or after June 25, 2002, without paying state sales tax or local
				  sales tax in those local jurisdictions that elect to provide an exemption for
				  these purchases. Sales tax paid on first purchases of qualifying digital
				  equipment on or after June 25, 2002, may be refunded as tax paid in
				  error.
v. License holders must submit to the Department of Revenue
				  an annual report of the purchases of digital equipment for which exclusion has
				  been claimed that includes all information required by the Department to verify
				  the value of exclusion claimed. Guidelines for submitting this report will be
				  published in a revenue ruling.
Taxing Authority
-the state of Louisiana, a
				  statewide political subdivision, and any political subdivisions of the state
				  authorized to levy and collect a sales or use tax by the Constitution or laws
				  of the state of Louisiana . The state of Louisiana and political subdivisions
				  whose boundaries are coterminous with those of the state are state taxing
				  authorities . Political subdivisions whose boundaries are not coterminous with
				  those of the state are local taxing authorities.
Taxing Jurisdiction
-the geographic area
				  within which a taxing authority may legally levy and collect a sales or use
				  tax.
Use
-
a.
Use
under state and local sales or use
				  tax law is intended to include not only the commonly accepted concept of
use
but also to cover the consumption, the distribution, or
				  the storage, or the exercise of any right of power over tangible personal
				  property. Since tax is imposed on the sale of tangible personal property,
use
has been defined to specifically exclude property sold at
				  retail in the regular course of business.
b. Neither does use apply to materials or property which are
				  combined with other materials to form an article of tangible personal property
				  which will subsequently be sold at retail. In this instance, the tax on those
				  materials will be collected on the retail sale. It is necessary, however, that
				  materials excluded from the definition of use because they were consumed in
				  creating a new piece of tangible personal property be identifiable in new
				  property and not merely expended during the course of the processing. All such
				  expended materials have been used by the processor or manufacturer and are
				  taxable to him at the time of purchase by him.
Use Tax
-the tax paid under state and local
				  sales or use tax law for the use, consumption, distribution, or storage for
				  use, distribution, or consumption within a taxing jurisdiction in lieu of sales
				  taxes. This is the tax required to be paid if no sales tax has been paid on
				  tangible personal property which is used, consumed, distributed, or stored for
				  use within the taxing jurisdiction.
AUTHORITY NOTE:
				  Promulgated in accordance with
				  R.S.
				  47:301 and
				  R.S.
				  47:1511.