Court Opinion

ID: 3465077
Source: CourtListenerOpinion
Date Created: 2016-07-05 20:29:37.549942+00
Date Added: 2024-06-11T09:21:31.573189
License: Public Domain

Dear Mr. Doherty:
You have requested an Opinion from this office concerning the Opelousas General Hospital's ("HOSPITAL") exemption from parish sales and use tax for the purchase of materials and equipment in connection with the HOSPITAL'S current construction project ("PROJECT").
In order to insure tax exempt treatment for the purchase of materials and equipment for the PROJECT, you advise that the HOSPITAL'S contractor has been designated as its purchasing agent for those materials and equipment to be incorporated into the PROJECT. The contractor makes purchases for the PROJECT in the name of the HOSPITAL, and payment to the vendors is made by the contractor as contractor-agent using funds that are accounted to the HOSPITAL. All materials and equipment that are to be incorporated into the project are titled over to the HOSPITAL upon their delivery to the construction site and prior to their incorporation into the PROJECT.
Finally, you advise that the HOSPITAL is public trust created under the provisions of La. R.S. 9:2341, et seq. The HOSPITAL'S beneficiary is the Hospital Service District Number One of St. Landry Parish, which by definition is a political subdivision of the State of Louisiana pursuant to La. R.S. 46:1072 (2).
It is the opinion of this office that the HOSPITAL, as an instrumentality of a political subdivision of the state, is clearly excluded from the definition of a "person" who would be liable for the payment of both state sales and use tax and the sales and use tax levied by any political subdivision. La. R.S.47:301 (8) (c).
It is also the opinion of this office that the agency designation and purchasing procedures followed by the HOSPITAL and its contractor-agent does not subject the contractor-agent to any use tax liability because title and possession of the materials and equipment passes directly from a vendor to the HOSPITAL. SeeRegional Mechanical Contractors Inc. vs. McNamara, 536 So.2d 818
(La.App. 1st Cir. 1988).
If you have any further question concerning this request or if it does not adequately address the matter that you have raised, please do not hesitate to contact our office.
Very truly yours,
                                 RICHARD P. IEYOUB ATTORNEY GENERAL
                                 BY: __________________________ Robert H. Carpenter, Jr. Assistant Attorney General
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