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Sales and Use Tax Ordinance

ADOPTED  METROPOLITAN COUNCIL DEC 14 1994

SALES AND USE TAX ORDINANCE 10127

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Amendment to Sales and Use Tax Ordinance No. 10904

Amendment to Sales and Use Tax Ordinance No. 12303

TO PROVIDE REVENUES FOR GENERAL MUNICIPAL PURPOSES FOR THE CITY OF BATON ROUGE, TO PROVIDE REVENUES FOR GENERAL PAROCHIAL PURPOSES FOR THE PARISH OF EAST BATON ROUGE, TO PROVIDE REVENUES FOR THE PURPOSE OF PAYING THE COSTS OF CONSTRUCTING, ACQUIRING, OPERATING, MAINTAINING, AND ADMINISTERING SEWERS AND SEWERAGE DISPOSAL WORKS AND MAKING ALL REQUIRED PAYMENTS IN CONNECTION WITH BONDS FOR SUCH PURPOSES AND TO PROVIDE REVENUES FOR THE REPAIR OF PUBLIC ROADS AND STREETS, BY LEVYING TAXES ON THE SALE AT RETAIL, THE USE, THE CONSUMPTION, THE DISTRIBUTION, AND THE STORAGE, TO BE USED OR CONSUMED IN THE TAXING JURISDICTION, OF ARTICLES OF TANGIBLE PERSONAL PROPERTY, AND UPON THE LEASING OR RENTING OF TANGIBLE PERSONAL PROPERTY IN THE TAXING JURISDICTION, AND UPON SALES OF SERVICES IN THE TAXING JURISDICTION; DEFINING THE TERMS "TANGIBLE PERSONAL PROPERTY", "DEALERS", "SALE", "RETAIL SALES", "SALES PRICE", "COST PRICE", "LEASE OR RENTAL", "STORAGE", ''USE",   "SALES OF SERVICES", "TAXING JURISDICTION" AND OTHER TERMS USED HEREIN; LEVYING AND PROVIDING FOR THE ASSESSMENT, COLLECTION, PAYMENT AND DISPOSITION OF SUCH TAXES; PROVIDING FOR DISPUTE RESOLUTION; DEFINING VIOLATIONS OF THE PROVISIONS OF THIS ORDINANCE AND PRESCRIBING PENALTIES THEREFORE; PROVIDING FOR RULES AND REGULATIONS FOR THE ENFORCEMENT OF THE PROVISIONS OF THIS ORDINANCE AND THE COLLECTION OF THE TAXES LEVIED THEREBY; PROVIDING THAT ANY PART OF THIS ORDINANCE WHICH MAY BE HELD INVALID OR UNCONSTITUTIONAL SHALL NOT AFFECT OR IMPAIR ANY OTHER PART THEREOF; AND PROVIDING THAT EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED HEREIN THE TAXES LEVIED HEREIN SHALL BECOME EFFECTIVE JANUARY 1, 1995.

BE IT ORDAINED by the Metropolitan Council of the Parish of East Baton Rouge and the City of Baton Rouge that:

Section 1. DEFINITIONS

As used in this ordinance, the following words, terms and phrases shall have the meaning ascribed to each in this section unless the context clearly indicates a different meaning.

a. "Business" means any activity engaged in by any person or caused to be engaged in by him with the object of gain, benefit, or advantage, either direct or indirect. The term "business" shall not be construed in this ordinance to include occasional and isolated sales or transactions by a person who does not hold himself out as engaged in business.

b. "City" means the City of Baton Rouge as is now or as may hereafter be constituted under The Plan of Government of the Parish of East Baton Rouge and the City of Baton Rouge.

c. (1) "Cost Price" means the actual cost of the articles of tangible personal property without any deductions there from on account of the cost of materials used, labor, or service cost, except those service costs for installing the articles of tangible personal property if such cost is separately billed to the customer at the time of installation, transportation charges, or any other expenses whatsoever, or the reasonable market value of the tangible personal property at the time it becomes susceptible to the use tax, whichever is less. "Cost price" shall not include the supplying and installation of board roads to oil field operators if the installation charges are separately billed to the customer at the time of installation.

(2) In the case of interchangeable components located in the taxing jurisdiction a taxpayer may elect to determine the cost price of such components as follows:

(a) The taxpayer shall send to the Director written notice of the calendar month selected by the taxpayer as the first month for the determination of cost price under this paragraph c(2) (the "First Month"). The taxpayer may select any month. The taxpayer shall send to the Director notice of an election to designate a First Month on the first day of the designated First Month.

(b) For the First Month and each month thereafter, cost price shall be based and use tax shall be paid only on one-sixtieth of the aggregate cost price of the interchangeable components deployed and earning revenue within the taxing jurisdiction during the month, without regard to any credit or other consideration for Louisiana state, political subdivision, or school board use tax previously paid on such interchangeable components.

(c) Any election made under this Paragraph shall be irrevocable for a period of sixty consecutive months inclusive of the First Month. If at any time after the sixty-month period the taxpayer revokes its election, no credit or other consideration for use taxes paid pursuant thereto shall be applied to any use tax liability arising after such revocation.

(d) For purposes of this Paragraph, "interchangeable component" means a component that is used or stored for use in measurement-while-drilling instruments or systems manufactured or assembled by the taxpayer, which measurement-while-drilling instruments or systems collectively generate eighty percent or more of their annual revenue from their use outside of the taxing jurisdiction.

(e) "Measurement-while-drilling instruments or systems" means instruments or systems which measure information from a down hole location in a borehole, transmit the information to the surface during the process of drilling the borehole using a wireless technique, and receive and decode the information on the surface.

(3) "Cost price" shall not include any amount designated as a cash discount or a rebate by a vendor or manufacturer of any new vehicle subject to the motor vehicle license tax. For purposes of this subparagraph "rebate" means any amount offered by the vendor or manufacturer as a deduction from the listed retail price of the vehicle.

d. "Dealer" means:

(1) Every person who imports, or causes to be imported, tangible personal property from any state or other political subdivision of this state, or foreign country, for sale at retail, for use or consumption, or distribution, or for storage, to be used or consumed in this taxing jurisdiction.

(2) Every person who manufactures or produces tangible personal property for sale at retail, for use, or consumption, or distribution, or for storage.

(3) Any person who sells at retail or who offers for sale at retail, or who has in his possession for sale at retail, or for use, or consumption, or distribution, or storage, to be used or consumed in the taxing jurisdiction, tangible personal property.

(4) Any person who has sold at retail, or used, or consumed, or distributed, or stored for use or consumption in the taxing jurisdiction, tangible personal property and who cannot prove that the tax levied by this ordinance has been paid on the sale at retail, the use, the consumption, the distribution, or the storage of such tangible personal property.

(5) Any person who leases or rents tangible personal property for a consideration, permitting the use or possession of such property without transferring title thereto. However, a person who leases or rents tangible personal property to customers who provide information to such person that they will use the property only offshore beyond the territorial limits of the state shall not be included in the term "dealer" for purposes of the collection of the rental or lease tax imposed by this ordinance on such lease or rental contracts. For purposes of this subparagraph, "use" means the operational or functional use of the property and not other uses related to its possession such as transportation, maintenance, and repair. It is the intention of this subparagraph that the customers of such persons shall remit any tax due on the lease or rental of such property directly to the taxing jurisdiction.

(6) Any person who is the lessee, permittee, licensee or rentee of tangible personal property and who pays to the owner of such property a consideration for the use or possession of such property without acquiring title thereto.

(7) Any person who sells or furnishes any of the services subject to tax under this ordinance.

(8) Any person who purchases or receives any of the services subject to tax under this ordinance.

(9) Any person engaging in business in the taxing jurisdiction. Engaging in business in the taxing jurisdiction means any of the following methods of transacting business: maintaining directly, indirectly or through a subsidiary, an office, distribution house, sales house, warehouse or other place of business, or by having an agent, salesman or solicitor operating within the taxing jurisdiction under the authority of the seller or its subsidiary irrespective of whether such place of business, agent, salesman or solicitor is located in the taxing jurisdiction permanently or temporarily, or whether such seller or subsidiary is qualified to do business in the taxing jurisdiction, or any person who makes deliveries of tangible personal property into the taxing jurisdiction other than by a common or contract carrier, or any person who makes deliveries of tangible personal property into the taxing jurisdiction in a vehicle owned or operated by such person.

e. "Director" means the Director of Finance of the City of Baton Rouge and the Parish of East Baton Rouge or his duly authorized assistants or employees.

f. "Free Hospital" means a hospital that does not charge any patients for health care provided by the hospital.

g. "Gross Sales" means the sum total of all sales of tangible personal property, and sales of services without any deductions whatsoever of any kind or character, except as provided in this ordinance.

h. "Lease or Rental" means the leasing or renting of tangible personal property and the possession or use thereof by the lessee or rentee, for a consideration, without transfer of the title of such property. The term "lease or rental", however, as herein defined, shall not mean or include the lease or rental made for the purposes of re-lease or re-rental of casing tools and pipe, drill pipe, tubing, compressors, tanks, pumps, power units, other drilling or related equipment used in connection with the operating, drilling, completion or re-working of oil, gas, sulphur or other mineral wells. The term "lease or rental" shall not mean or include a lease or rental of property to be used in performance of a contract with the U. S. Department of the Navy for construction or overhaul of U. S. Naval vessels, nor the lease or rental of airplanes or airplane equipment by a commuter airline domiciled in Louisiana, nor the lease or rental of items, including, but not limited to, supplies and equipment, which are reasonably necessary for the operation of free hospitals.

i. "Off-road Vehicle" means any vehicle which is issued a manufacturer's statement of origin that cannot be issued a registration certificate and license to operate on the public roads of this state because the vehicle does not meet the safety requirements prescribed by R.S. 32:1301 through R.S. 32:1310. This includes vehicles that are issued a title only by the Vehicle Registration Bureau, Department of Public Safety, such as recreational and sport vehicles, but it does not include farm equipment or heavy construction equipment.

j. "Parish" means all of the Parish of East Baton Rouge as the parish is now or may hereafter be constituted, without any limitations whatever.

k. (1) "Persons" means any individual, firm, co partnership, joint adventure, association, corporation, cooperative, estate, trust, business trust, receiver, syndicate, any parish, city, municipality or public board, public commission or public or semipublic corporation, district or other political subdivision or any board, agency, university, school, college, instrumentality or other group or combination acting as a unit, and the plural as well as the singular number.

(2) For purposes of the payment of the taxes levied herein, "Person" shall not include the State of Louisiana, this parish, city and parish, or municipality, any other parish, city and parish, municipality, district, or other political subdivision thereof, or any agency, board, commission, or instrumentality of Louisiana or its political subdivisions.

l. "Purchaser" means any person who acquires or receives any tangible personal property, or the privilege of using any tangible personal property, or receives any services pursuant to a transaction subject to tax under this ordinance.

m. (1) "Retail Sale" or "sale at retail" means a sale to a consumer or to any person for any purpose other than for resale in the form of tangible personal property and a sale of services, as hereinafter set forth, and shall mean and include all such transactions as the Director, upon investigation, finds to be in lieu of sales. Sales for resale must be made in strict compliance with the rules and regulations. Any dealer making a sale for resale which is not in strict compliance with the rules and regulations will, himself, be liable for, and pay the tax.

(2) "Sale at Retail" does not include sale of materials for further processing into articles of tangible personal property for sale at retail or sales of electricity for chlor-alkali manufacturing processes, nor does it include an isolated or occasional sale of tangible personal property by a person not engaged in such business. The exclusion of isolated or occasional sales shall not apply to the sale of vehicles, and the term "sale at retail" shall include isolated or occasional sales of vehicles and the tax shall be collected thereon as provided in Section 6(c) hereof. The term "sale at retail" does not include the sale of any human tissue transplants, which shall be defined to include all human organs, bone, skin, cornea, blood, or blood products transplanted from one individual into another recipient individual, nor does it include the sale of food items by youth serving organizations chartered by Congress. The term "retail sales" does not include a sale of corporeal movable property which is intended for future sale to the United States Government or its agencies, when title to such property is transferred to the United States Government or its agencies prior to the incorporation of that property into a final product.

(3) "Sale at retail" does not include the sale of tangible personal property to food banks, as defined in R.S. 9:2799. (This subparagraph (3) shall be effective August 21, 1992).

(4) "Sale at retail" does not include the purchase of a new school bus or a used school bus which is less than five years old by an independent operator, when such bus is to be used exclusively in a public school system.

(5) "Sale at retail" does not include the sale of airplanes or airplane equipment or parts to a commuter airline domiciled in Louisiana.

(6) "Sale at retail" shall not include the sales of Louisiana manufactured or assembled passenger aircraft with a capacity in excess of fifty persons, if, after all transportation, including transportation by the purchaser, has been completed, the aircraft is ultimately received by the purchaser outside of Louisiana. (This subparagraph (6) shall be effective August 21, 1992.)

(7) "Sale at retail" does not include the sales of pelletized paper waste when purchased for use as combustible fuel by an electric utility or in an industrial manufacturing, processing, compounding, reuse, or production process, including the generation of electricity or process steam, at a fixed location in this state. However, such sale shall not be excluded unless the purchaser has signed a certificate stating that the fuel purchased is for the exclusive use designated herein. For purposes of this subparagraph, "pelletized paper waste" means pellets produced from discarded waste paper that has been diverted or removed from solid waste which is not marketable for recycling and which is wetted, extruded, shredded, or formulated into compact pellets of various sizes for use as a supplemental fuel in a permitted boiler. (This subparagraph (7) shall be effective July 1, 1993.)

(8) "Sale at retail" shall not include the sale or purchase of equipment used in fire fighting by bona fide volunteer fire departments. (This subparagraph (8) shall be effective July 1, 1992.)

(9) "Sale at retail" shall not include the sale of items, including, but not limited to, supplies an equipment, which are reasonably necessary for the operation of free hospitals.

n. "Retailer" means and includes every person engaged in the business of making sales at retail or rendering services taxable hereunder.

o. "Sale" means any transfer of title or possession or both, exchange, barter, conditional or otherwise, in any manner or by any means whatsoever of tangible personal property for a consideration and includes the fabrication of tangible personal property for consumers who furnish, either directly or indirectly, the materials used in fabrication work, and the furnishing, preparing or serving, for a consideration, of any tangible personal property consumed on the premises of the person furnishing, preparing or serving such tangible personal property. A transaction whereby the possession of property is transferred, but the seller retains title as security for the payment of the price, shall be deemed a sale. The term "sale" also includes the sales of services.

p. "Sales of Services" means and includes the following:

(1) The furnishing of rooms by hotels and tourist camps;

(a) The term "Hotel" means any establishment engaged in the business of furnishing sleeping rooms, cottages or cabins to transient guests where such establishments consist of six (6) or more guest rooms, sleeping rooms, cottages or cabins at a single business location.

(b) The term "Tourist Camp" means any establishment engaged in the business of furnishing rooms, cottages or cabins to tourists or other transient guests, where the number of guest rooms, cottages or cabins at a single location is six (6) or more.

(2) The sale of admissions to places of amusement, to athletic entertainment other than that of schools, colleges and universities, and recreational events, and the furnishing, for dues, fees, or other consideration, of the privilege of access to clubs or the privilege of having access to or the use of amusement, entertainment, athletic or recreational facilities, but the term "sales of services" shall not include membership fees or dues of nonprofit civic organizations, including by way of illustration and not of limitation the Young Men's Christian Association, the Catholic Youth organization and the Young Women's Christian Association. "Places of Amusement" shall not include museums, which are hereby defined as public or private nonprofit institutions which are organized on a permanent basis for essentially educational or aesthetic purposes and which use professional staff to do all of the following:

(a) Own or use tangible objects, whether animate or inanimate.

(b) Care for those objects.

(c) Exhibit them to the public on a regular basis.

Museums include but are not limited to the following institutions:

(a) Museums relating to art, history, including historic buildings, natural history, science, and technology.

(b) Aquariums and zoological parks.

(c) Botanical gardens and arboretums.

(d) Nature centers.

(e) Planetariums.

(3) The furnishing of storage or parking privileges by auto hotels and parking lots;

(4) The furnishing of printing or overprinting, lithographic, multilith, blueprinting, photostating or other similar services of reproducing written or graphic matter;

(5) The furnishing of laundry, cleaning, pressing and dyeing services, including by way of illustration and not of limitation, the cleaning and renovation of clothing, furs, furniture, carpets and rugs, and the furnishing of storage space for clothing, furs and rugs;

(6) The furnishing of cold storage space and the furnishing of the service of preparing tangible personal property for cold storage where such service is incidental to the operation of storage facilities; and,

(7) (a) The furnishing of repairs to tangible personal property, including by way of illustration and not of limitation, the repair and servicing of automobiles and other vehicles, electrical and mechanical appliances and equipment, watches, jewelry, refrigerators, radios, shoes and office appliances and equipment.

(b) For the purpose of this subparagraph, tangible personal property shall include machinery, appliances, and equipment which have been declared immovable by declaration under the provisions of Article 467 of the Louisiana Civil Code and things which have been separated from land, buildings or other constructions permanently attached to the ground or their component parts as defined in Article 466 of the Civil Code.

(8) The term "Sale of Service" shall not include an action performed pursuant to a contract with the U. S. Department of the Navy for construction or overhaul of U. S. Naval vessels.

q. (1) "Sales Price" means the total amount for which tangible personal property is sold, less the market value of any article traded in, including any services, except services for financing, that are a part of the sale valued in money, whether paid in money or otherwise, and includes the cost of materials used, labor or service costs, except costs for financing, which shall not exceed the legal interest rate and a service charge not to exceed six percent (6%) of the amount financed, and losses; provided that cash discounts allowed and taken on sales shall not be included, nor shall the sales price include the amount charged for labor or services rendered in installing, applying, remodeling or repairing property sold. Any provision of this ordinance to the contrary notwithstanding, the sales tax levied herein on any transaction in which a part of the purchase price is represented by an article traded in shall be payable on the total purchase price less the market value of the article traded in. At such time as the article traded in is sold, the sales tax shall be collected in the same manner and to the same extent as in the case of the original sale.

(2) "Sales Price" shall not include any amount designated as a cash discount or a rebate by the vendor or manufacturer of any new vehicle subject to the motor vehicle license tax. For purposes of this subparagraph "rebate" means any amount offered by a vendor or manufacturer as a deduction from the listed retail price of the vehicle.

(3) "Sales Price" shall not include the first Fifty Thousand Dollars of the sales price of new farm equipment used in poultry production.

r. "Storage" means any keeping or retention in the taxing jurisdiction of tangible personal property.

s. "Tangible Personal Property" means personal property which may be seen, weighed, measured, felt or touched, or is in any other manner perceptible to the senses. The term "tangible personal property" shall not include stocks, bonds, notes or other obligations or securities; gold, silver or numismatic coins, or platinum, gold, or silver bullion having a total value of one Thousand Dollars or more; or proprietary geophysical survey information or geophysical data analysis furnished under a restricted use agreement even though transferred in the form of tangible personal property. The term "tangible personal property" shall also not include the repair of a vehicle by a licensed motor vehicle dealer which is performed subsequent to the lapse of the applicable warranty on that vehicle and at no charge to the owner of the vehicle. For the purpose of assessing a sales and use tax on this transaction, no valuation shall be assigned to the services performed or the parts used in the repair. (The clause relative to warranty repairs shall be effective August 21, 1992.)

t. "Taxing Jurisdiction" means the City or the Parish, as herein defined, as may be appropriate.

u. (1) "Use" means the exercise of any right or power over tangible personal property incident to the ownership thereof, except that it shall not include the sale at retail of that property in the regular course of business or the donation to a school in the state which meets the definition provided in R.S. 17:236 or to a public or recognized independent institution of higher education in the state of property previously purchased for resale in the regular course of a business.

(2) "Use" shall not include the exercise of any right or power by a free hospital over items, including, but not limited to, supplies and equipment, which are reasonably necessary for the operation of the free hospital.

v. "Verifiable Records" means documents sufficient to independently support claims of sales and purchases. The Director is authorized to provide by rule and regulation specific documentation necessary to satisfy this requirement.

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