Tax Facts Index

New Laws Affect Sales and Use Tax

The Louisiana Legislature enacted several measures affecting local sales and use taxes during its 2003 Regular Session. The measures include:

Act 73 (SB 551) enacts the Uniform Local Sales Tax Code. The Uniform Local Sales Tax Code will supplement all local sales and use tax ordinances throughout the state, and will allow businesses and tax practitioners to easily understand Louisiana’s state and local sales tax laws. Act 73 also includes a Uniform Return and Remittance System that must be implemented by January 1, 2005. This system will be an online service available from the Louisiana Department of Revenue which will allow a company, at no cost, to file both their state and local sales and use tax returns in a single filing via the internet. Also included in the Act is a uniform procedure for administration of local sales taxes, which is the same as the state’s procedures.

Act 46 (HB 1750) provides for the taxable nature of cellular and PCS telephones, or other wireless PC devices, or electronic accessories physically connected with such telephones used in connection with the sale or use of mobile telecommunications services.

Act 61 (SB 791) provides that tangible personal property shall not include other constructions permanently attached to the ground for local tax purposes.

Act 141 (HB 1621) provides for direct payment numbers for private, non-profit, tax-exempt organizations. It also extends until June 30, 2005, the sales tax exclusion on educational materials purchased.

Electronic Filing is Here!!

The City-Parish Revenue Division is accepting applications from taxpayers who wish to file their monthly sales tax returns electronically. Monthly filers will now have the option of filing and paying online. Returns for “No Sales” may also be filed either online or by phone at (225) 344-4636, extension 5000. For more information please visit our web site at www.brgov.com and click on “Sales Tax Payments.”

Are You Using the Proper Tax Form?

In the July 2003 issue of Tax Facts you were advised that changes had been made to our “Sales and Use Tax Report” form. This follow-up is to remind all taxpayers to use the new six-column form effective with the July 2003 reporting period. Any four-column tax forms currently in your possession should be disposed of to ensure that the proper form is prepared and submitted. You are also reminded that the use of any unofficial forms, such as the old four-column form or forms that have not been approved by this office, could result in delays in processing your return. Questions regarding the proper use of tax forms should be directed to the Revenue Division.

Resale Exemption Certificates

Rule 12 (A) of the East Baton Rouge Parish Sales and Use Tax Regulations states, “The Finance Director will consider all sales to be taxable retail sales unless the seller takes from the buyer a resale exemption certificate, signed by and bearing the name, address, and registration number of the buyer to the effect that the property is purchased for resale.” If the buyer is located in East Baton Rouge Parish, dealers may recognize that the articles are purchased for resale only when the buyer is properly registered under the provisions of the local ordinances. If the buyer is located out of Parish, dealers may recognize that the articles are purchased for resale only when they are allowed under the provisions of state law.

The most important item on the resale exemption certificate is the purchaser’s sales/use tax registration number. Only local retail dealers that are properly registered with the Revenue Division have received an East Baton Rouge Parish sales tax registration number. Out-of-parish retail dealers must provide their state and local sales tax numbers. The seller must collect sales tax when the buyer cannot provide a properly executed certificate.

Dealers must use some judgment when accepting resale exemption certificates. The fact that a retail dealer is properly registered in accordance with the law does not mean that all of his purchases are for the purpose of resale. For example, a retail dealer of auto parts and accessories would not be buying a diamond ring for resale. Another example involves construction contractors who purchase building materials for a real property construction contract. Contractors are not retail dealers and are considered the final consumer of the materials purchased. Clearly, these transactions are not for resale and therefore, are not exempt. The burden of proving that a sale is, in fact, for resale shall be on the seller. The seller must carefully review each purchase and should consider the nature of the purchaser’s business before accepting a resale exemption certificate.

Dealers shall keep all resale certificates furnished to them by retail dealers. Any changes in business status, such as trade name, location or registration number should result in an updated resale exemption certificate executed by the purchaser. These certificates are required if the dealer is audited by the Finance Department.

In summary, resale exemption certificates are a very important part of a retail dealer’s business. Purchases for resale must be made in strict compliance with the rules and regulations. Any dealer who fails to obtain a certificate will be liable for the tax. Resale exemption forms may be obtained from the Revenue Division or from the Finance Department’s web site by clicking on the “Tax Forms” link.

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.

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