New Laws Affect Sales and Use Tax
 

The Louisiana Legislature enacted several measures affecting local sales and use taxes during its 2002 Special and Regular Sessions. The measures include:

Act 3 (HB-104) Provides a sales and use tax exclusion for capital expenditures by biotechnology companies.

Act 7 (HB-30) Provides an exclusion from the state sales and use tax for certain computer software. This exemption is optional for local sales and use tax. The local jurisdictions in East Baton Rouge Parish have not adopted an exemption for custom computer software.

Act 98 (HB-127) Provides sales tax filing requirements for the state and its departments, agencies, boards and commissions.

2002 Regular Session

Act 64 (HB-135) Extends the time limitations for the exclusion of motor vehicles purchased for lease.

Act 67 (HB-158) Provides an exclusion from state and local sales and use tax for certain costs of publishing businesses.

Act 85 (SB-86) Provides a sales and use tax exclusion for certain tangible personal property sold by a dealer in connection with the sale or use of mobile telecommunication services. On July 24, 2002, a State District Court Judge issued a preliminary injunction regarding this sales and use tax exclusion. As a result, this exclusion is not in effect until the courts issue a final decision.

Act 61 (HB-124) Excludes digital television and digital radio conversion equipment from state sales and use tax. Authorizes local taxing agencies to adopt an ordinance excluding this equipment. The local jurisdictions in East Baton Rouge Parish have not adopted this exclusion.

Act 56 (HB-82) Excludes certain transactions relating to manufactured homes from local sales and use tax. This exclusion is phased in over four years, beginning January 1, 2003.

Act 70 (HB-205) Excludes from state and local sales and use tax purchases by non-profit blood banks and blood collection centers.

Act 71 (HB-207) Excludes from state and local sales and use tax apheresis kits and leuko reduction filters used by non-profit blood banks and blood collection centers.

Act 37 (SB-57) Local taxing agencies are authorized to adopt an exemption for the sales, administration, or procurement of certain prescription drugs. The local jurisdictions in East Baton Rouge Parish have not adopted this exemption.

Act 42 (SB-71) Provides an exemption from local sales and use tax for cancer and related chemotherapy prescription drugs.

Act 31 (SB-39) Provides an exemption from state and local sales and use tax for repairs on drilling rigs and equipment used offshore.

Act 40 (SB-62) Defines "foreign or interstate coastwise commerce" with respect to the exemption provided owners and operators of ships or vessels operating in such commerce.

Act 41 (SB-70) Provides an exemption from state and local sales and use tax for ships and ship supplies.

Act 27 (SB-11) Provides an exemption from state and local sales and use tax for non-profit literacy organizations.

Act 2 (HB-40) Extends the exemption for certain buses, trucks, and trailers used in interstate commerce.

Act 49 (HB-26) Extends the exemption for purchases of utilities used by certain steelworks and blast furnaces.

Act 6 (HB-73) Authorizes local taxing agencies to adopt an ordinance exempting farm equipment from local sales and use tax. The local jurisdictions in East Baton Rouge Parish have not adopted this exemption.

Act 4 (HB-54) Extends the state and local sales and use tax exemptions for boiler fuel.

Cell Phone Exemptions - Preliminary Injunction

On July 24, 2002, the State District Court issued a preliminary injunction on the sales and use tax exclusion for cell phone equipment. The exclusion was challenged by the Policy Jury Association of Louisiana and the Louisiana Municipal Association. A lawsuit was filed against the state claiming the Louisiana Constitution prohibits the Legislature from releasing or extinguishing any indebtedness, liability, or obligation of a corporation to the state, a parish, or a municipality. As a result of the preliminary injunction issued by District Court Judge Curtis Callaway, the cell phone exclusion is not in effect until the courts issue a final decision. Until then, all sales and use taxes due in the local jurisdictions in East Baton Rouge Parish on cell phone equipment will be based on Rule 117, Cellular Telephones, of our Rules and Regulations.

A. Sales of cellular telephone equipment and repairs of cellular telephones are subject to sales tax. Cellular telephone service charges (air-time) are not subject to tax.

B. Cellular telephones sold for less than fair market value or given away with the condition that the customer subscribe to cellular services for a specified period of time, are subject to use tax based on the cost price of the cellular phone. Credit will be given for local sales and use tax paid on the sale of the telephone.

Digital Imaging System

As published in the July 2001 and the October 2001 issues of the “Tax Facts," the Revenue Division has implemented its digital imaging system. As a result, we will no longer be able to accept photo copies, fax copies, spreadsheets, and tax services prepared forms.

In addition, when preparing your return, you must round to the nearest dollar and record all deductions on the back of the sales and use tax return. The Sales Tax Worksheet  should be used in preparing your return. You may download the worksheet and the sales and use tax instructions from our web site under the "Forms" link on the Finance Department's home page.

Sales Tax Due Dates

Following are the sales tax due dates for the fourth quarter of 2002:

Remember to mail your return early!  Returns bearing a U.S. postmark on or after the above delinquent dates will be assessed penalty, interest, and loss of vendor's compensation.

How Important Is a Postmark Date?

The Revenue Division computer system uses the U.S. Post Office postmark on the envelope in determining whether a return is current or delinquent. The due date for all registered filers is the 1^st of the month in which the sales and use tax is due. A return is considered delinquent after the 20^th of the same month (see Tax Facts, October 1995). If the 20^th falls on a weekend or holiday, the return must be postmarked by the next work day. Any taxpayer whose return is postmarked after the delinquent date will receive a notice of additional tax (forfeiture of vendor’s compensation) , penalty, and interest due. The return will be considered as a partial payment, and the taxpayer will receive delinquent notices until final remittance is made.

The U.S. Post Office postmark is used to enforce the assessment of penalty and interest and the loss of vendor’s compensation. It is the responsibility of each dealer to ensure that sales and use taxes are transmitted in a timely manner. Additionally, dealers should be aware that giving their return to their route postal worker on the 20^th could result in a delinquent return if the envelope is not postmarked until the next day. To avoid this situation, all taxpayers are urged to mail early to ensure that their returns are recognized as filed timely.
 

Need Help?

Taxpayers may call the Revenue Division to receive assistance at the following telephone numbers between the hours of 8 a.m. and 5 p.m., Monday - Friday.

Taxpayer Topics

The Tax Facts Newsletter is issued quarterly by the Department of Finance/Revenue Division.  Our mission is to provide taxpayers with information concerning developments and policies regarding the collection of local sales tax within East Baton Rouge Parish.  The Revenue Division invites any suggestions, questions or comments that you would like addressed in future issues of Tax Facts.  Please address these items to:

City of Baton Rouge - Department of Finance
P. O. Box 2590
Baton Rouge, LA  70821-2590
ATTENTION:  Steve Thomas, Assistant Revenue Manager
or send e-mail to sthomas@brgov.com