Calcasieu Parish Police Jury, Calcasieu Parish LED Dist. 1,
Southwest Louisiana Convention & Visitors Bureau
CALCASIEU TAX REVIEW
Are Calling Cards Taxable?
Unlike the Louisiana Department of Revenue, local sales taxes are not due on the services provided by this industry. As a measure of caution, since the industry is one of the rapidly growing arenas, dealers are advised to call the Louisiana Department of Revenue office periodically for confirmation of the tax status of services performed or sold in the telecommunication industry.
In consideration of a dealer's good faith effort, the department will not attempt to invoke penalties and interest on taxes paid erroneously to another jurisdiction, unless there is sufficient reason to believe that the erroneous payments were an act of negligence or intentional on the part of the dealer collecting and remitting the taxes. Now, in the instance of a dispute between taxing jurisdictions over which authority deserves the tax, the jurisdictions in dispute will have to resolve the matter among themselves, as necessary.
While there are indisputable activities that constitute events of "use", it is not the intention of this taxing authority to tax property purchased for the eventual sale at retail. Further, "use" does not apply to material or property purchased for further processing or for combining property with other materials for the purpose of producing an article of tangible personal property that would subsequently be sold at retail as a finished product. At the time of the retail sale, the materials combined to form the article of tangible personal property will be taxed.
As a general rule, materials must become an identifiable or significant part of the finished product in order to be recognized as a material that was combined with other materials or further processed. On the other hand, any material or property consumed or expended in the process of forming an article of tangible personal property is subject to "use tax" under the basic concept of "use".
Examples of common articles of property that are subject to use tax because dealers exercise their power of use over them are office equipment, office supplies, business furniture, shop tools and equipment, and promotional products. Of course, dealers are always advised to make inquiries any time a question of taxation arises.
More importantly, the term "sales of service" shall not be taxable when non-profit civic organizations charge membership fees or dues. Further, illustration of organizations who collect membership dues, but who are not included under the term "sales of service" are the Young Men's Christian Association, the Catholic Youth Organization, and the Young Women's Christian Association.
Although we sometimes think of museums as places of amusement, for tax purposes, they are not included under the taxable class of "places of amusement" because they are public or private non-profit institutions organized on a permanent basis for educational or aesthetic purposes, which use professional staff to perform specific tasks. Other non-taxable "places of amusement" are camp and retreat facilities owned and operated for religious purposes by non-profit religious organization, which includes recognized domestic non-profit corporations organized for religious purposes, provided that the net revenue derived from the organization's property is devoted wholly to religious purposes.
July 1, 1999 - June 30, 2000 = 25%
Vendors who sell to lease/rental dealers are advised to report the amount excluded under the "other deductions" section of your local sales/use tax report and identified by the term "Act 1266". Failure to properly identify the exclusion will result in its disallowance and a debit memo will be produced.
Dealers who purchase tangible personal property for subsequent lease or rental purposes where no local taxes have been paid are instructed to report the appropriate taxable amount under Line 14 (Purchases subject to use tax) enter only the taxable amount remaining after applying the proper percentage excluded from tax. The phase in exclusion only applies to lease/rental property and not other forms of tangible personal property subject to use tax. (Example: office equipment, supplies, etc.)
Dealers who perform repairs to their own lease or rental property cannot purchase repair parts under the phase-in exclusion. These purchases will be considered taxable since they clearly fall under the definition of "sale at retail" or "retail sale", i.e. "a sale to a consumer or to any other person for any purpose other than resale as tangible personal property". Although the Louisiana Department of Revenue permits similar purchases by lease or rental dealers who hold valid LGST-61 Exemption Certificates to come under the tax exemption, we have not been provided with a statutory basis to support this action.
Repairs to rental or leasing property performed by repair shops or other similar dealers are fully taxable when the repairs are performed in Calcasieu Parish. Equipment or machinery repaired outside the parish upon which no sales tax has been charged by the vendor will subject any parts added to our local tax, labor excluded when separately charged on the invoice. In the absence of any separation of parts and labor, the entire transaction will be subject to our tax. Questions concerning Act 1266 should be directed to Field Auditors or the office of the Director. Exemption certificates are available through the Sales Tax Department for dealers who are engaged in leasing or renting of tangible personal property.
The Sales Tax Department will be closed for the following holidays:
M. L. King, Jr. Day January 15, 2001
RETURN DUE DATES
January return due by February 20th
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