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Tax Facts Vol. 8, No. 3

Tax Facts Index

TAX FACTS

EAST BATON ROUGE PARISH

Department of Finance

Vol. 8, No. 3

July 1997

 

Local sales and use tax renewal

On May 3, 1997, the voters of East Baton Rouge Parish approved the renewal of a 1/2% Sales and Use Tax applicable to taxable transactions in the City of Baton Rouge, Parish of East Baton Rouge, City of Baker and City of Zachary. This renewal is for a period of five years beginning July 1, 1997 through June 30, 2002. Proceeds from the tax will be used for building new public roads and streets, and repairing and improving public roads and streets in the City of Baton Rouge, Parish of East Baton Rouge, City of Baker and City of Zachary. Certain foods, drugs and other medically related items are still exempt from the tax.

Due to the renewal of this tax, the local Sales and Use Tax rate will remain 4%.

Resale exemption certificates

Rule 12 (A) of the East Baton Rouge Parish Sales and Use Tax Regulations states, "The Director (of Finance) 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 sales/use tax registration number of the buyer to the effect that the property is purchased for resale. If the buyer is located in the 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 or under the provisions of the State sales tax law if the buyer is located elsewhere within the State."

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 judgement 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 Department of Finance. Any dealer who fails to provide certificates shall be liable for and pay the tax himself.

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.

Sales tax due dates

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

For the

Tax Due

Delinquent

Month of

Date

Date

July

August 1

August 21

August

September 1

September 23

September

October 1

October 21

 

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., Monday - Friday.

Sales/Use Tax

(225) 389-3084

Occupational License Tax

(225) 389-3278

Business License and Permit Office

(225) 389-3278

Fax Number  

(225) 389-5369