Tax Facts Index

Motor Vehicles purchased for lease and automobiles purchased for rental

In 1996 the Louisiana Legislature passed two Bills that will have a major impact on local sales and use tax. Act 12 (Senate Bill 48) excludes from sales and use tax motor vehicles purchased for lease purposes and Act 7 (House Bill 97) excludes from sales and use tax automobiles purchased for rental purposes. Act 7 also provides for a tax of one-half (1/2%) percent on the rental of automobiles for the benefit of local taxing authorities which will offset a large part of the revenue loss from this legislation. These Acts exclude from sales and use tax the initial purchase of motor vehicles used for lease and automobiles used for rental.

Although these two Acts seem to be very similar, they are very different. Act 12 excludes only motor vehicles purchased for lease purposes. The term "Motor Vehicle" means every vehicle which is self-propelled and subject to the vehicle registration license tax of the State of Louisiana. This includes automobiles, motorcycles, trucks, truck-tractors and motor buses. It does not apply to any motor vehicle that is not subject to the vehicle registration license tax such as cranes, dozers, backhoes and other construction equipment. This Act only applies to leased motor vehicles. The term "Lease" means the leasing of motor vehicles and the possession or use by the lessee, for a consideration, without the transfer of title for a period of one hundred eighty (180) days or more. The effective date of Act 12 is July 1, 1996.

Act 7 excludes only automobiles purchased for rental purposes. The term "Automobile" means a vehicle designated to carry less than nine passengers. This Act only applies to rented automobiles and "Rental" means the renting of automobiles and the possession or use thereof by the renter, for a consideration, without the transfer of title for a period less than one hundred eighty (180) days. The effective date of this Act is July 1, 1996.

These new Acts exclude the sales and use tax on the acquisition of motor vehicles for lease and automobiles for rental, however, the local sales tax on the gross receipts from the lease or rental continues to be imposed.

1997 Occupational License renewals

Businesses are reminded that their 1997 Occupational License renewals were placed in the mail in December. Any unpaid licenses after February 28, 1997, will be deemed delinquent and subject to penalty and interest. Penalty at the rate of 5% per month, or fractional part thereof, not to exceed 25% and interest at the rate of 1.25% per month, or fractional part thereof, will be computed from the first day of March and will increase on the first day of each succeeding month. Please file renewals timely.

Sales tax due dates

Following are the sales tax due dates for the first quarter of 1997:

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

Taxpayer topics

Tax Facts is issued quarterly by the Department of Finance/Revenue Division to provide 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, Louisiana 70821-2590

ATTENTION:
Steve Thomas
Assistant Revenue Manager

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., weekdays.