RENTAL OF PORTABLE TOILET FACILITIES NOW TAXABLE
According to Louisiana Department of Revenue
Ruling No. 06-013 issued September 19, 2006, the furnishing of temporary
portable toilet facilities is considered as a lease or rental of tangible
personal property because the customer pays a consideration for the right to use
the property without acquiring the title to the property. The portable toilet is
clearly classifiable as tangible personal property because it is movable
Louisiana Revised Statute 47:302(B) levies a tax upon the gross proceeds derived
from the lease or rental of tangible personal property, where the lease or
rental of such property is an established business, or part of an established
business, or the same is incidental or germane to the said business. Louisiana
Revised Statute 47:302(B)(2) levies a tax upon the monthly lease or rental price
paid by lessee or rentee, or contracted or agreed to be paid by lessee or rentee
to the owner of the tangible personal property. Louisiana Revised Statute
47:301(7)(a) defines the term “lease or rental,” as “the leasing or renting of
tangible personal property and the possession or use thereof by the lessee or
renter, for a consideration, without transfer of the title of such property”.
Louisiana Administrative Code title 61:I.4303(B)(1)(e) provides that “operating
expenses and maintenance costs for keeping leased property in repair cannot be
deducted from gross proceeds in arriving at the taxable base.” This means that
the charges to the customer for waste removal and sanitation of the portable
toilets are included in the taxable base. However, because of the judicial
decision in McNamara v. Patterson Services Inc., 382 So, 2d 971(La. App. 1 Cir.
1980) sales tax shall not apply to any separately stated charges for the
delivery and pick up of the leased or rented property.
The Revenue Division takes the position that the furnishing for consideration of
the temporary use of portable toilet facilities are taxable as leases or
rentals. The taxable base will include the charges for the lease or rental, as
well as any charges for the cleaning and sanitation of the facilities,
regardless of whether those charges are or are not separately stated.
Additionally, any separately stated charges for the delivery and pick up of the
property are excludible from the taxable base on the lease or rental of the
property. The tax on leases and rentals must be remitted by the 20th of the
months following the months in which payments for leases and rentals are
The portable toilet facilities and other durable tangible personal property that
dealers acquire for the exclusive purpose of lease or rental as tangible
personal property are eligible as a tax exempt purchase pursuant to Louisiana
Revised Statute 47:301(10)(a)(iii).
This change is prospective and becomes effective on January 1, 2007. As a
result, dealers will not be allowed to claim prior purchases of toilet
facilities as tax exempt under the above statute. All dealers, however, will be
required to collect the sales or use tax on leases and rentals of portable
toilet facilities as of January 1, 2007, regardless of whether the sales or use
tax was paid at the time the property was purchased for lease or rent.
Any questions regarding this position change should be directed to the Revenue
Division at 225-389-3084.
SIX BATON ROUGE BUSINESSMEN INDICTED BY GRAND JURY
According to a news article which appeared in the
Advocate on December 12, 2006, a grand jury alleges Roman’s Café owner Jamal
Roman, Arzi’s Restaurant and Cajun Café owner Rostom Laymon and others under
reported their sales to state and local governments. The estimated loss in sales
tax revenue is $1 million in addition to an unknown amount of payroll taxes.
Those charged include:
Jamal Roman of Baton Rouge, owner of Mes Padres, formally Papacito’s Restaurant
in Prairieville and on Bluebonnet Boulevard; Roman’s Café on Perkins Road,
Roman’s Mediterranean Restaurant on Airline Highway and Roman’s Lebanese Greek
Market on Government Street. Roman is charged with seven counts of mail fraud in
connection with sales tax and payroll tax fraud and three counts of bribery.
Rostom Laymon, owner of Arzi’s Restaurant on Government Street and Arzi’s
Express and Cajun Café in the Mall of Louisiana. Laymon is charged with nine
counts of mail fraud in connection with sales tax and payroll tax fraud and
three counts of bribery. He intends to plead guilty.
Humam Al-Alousi, who owns Side Stop Convenience store on Florida Boulevard and
General Goods of Louisiana on Greenwell Springs Road is charged with two counts
of mail fraud, one count of bribery, one count of using an interstate facility
in aid of racketeering, and lying to a federal agent. Al-Alousi intends to plead
Khoa Dinh Chau, who owns Lee’s Grocery on Foster Drive and Weller’s Grocery on
Weller Avenue, pleaded guilty in November to one count of mail fraud and
bribery. Sentencing has not been scheduled.
Hassan Abouosayd, owner of Pennywise Accounting and Tax Service, pleaded guilty
in August to four counts of bribery and one count of using an interstate
facility in aid of racketeering. Sentencing has not been scheduled.
Mohamed Ruman is charged with two counts of mail fraud.
The investigation began three years ago, but the indictments and plea agreements
were kept secret until December 2006.
OCCUPATIONAL LICENSE TAX RENEWALS
Occupational License Tax Renewals for 2007 were
mailed to businesses in early December. Licenses renewed after March 1, 2007,
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
OCCUPATIONAL LICENSE TAX RENEWALS ON-LINE
Any registered occupational license taxpayer that
receives a personal identification number (PIN) along with their renewal form,
is eligible to file and pay their 2007 Occupational License Tax on-line. You can
access our website at www.brgov.com/dept/finance and click on Occupational
License Tax Renewals to pay on-line. Renewals for tax codes 1520 (Service) and
1525 (Retail Dealer) with gross receipts of less than $2,500 will not be
accepted on-line. Those taxpayers must file a paper return.
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.