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Louisiana sales and use tax laws are not applicable to revenue sharing agreements between leasing companies and an owner of tangible personal property for leasing purposes. This is due to the fact that the arrangement isn't within the scope of the definition of "lease or rental" of tangible personal property. The property owner supplied items to be leased by the leasing company in exchange for a usage fee. The usage fees were not considered lease or rental payments because the property owner still held control of the property and supplied the items at its own discretion. The usage fee was paid only if the property was rented. Under the Louisiana Civil Code, a company must have "enjoyment of the property during a certain time" to be considered a lease or rental from the property owner. (Private Letter Ruling No. 03-002, Louisiana Department of Revenue, February 25, 2003)


Out-of-state companies who provide high-speed downloading capabilities are not subject to Louisiana sales and use tax. This service is not considered a "telecommunications service" which falls under the information services currently taxable in the state. Purchasing dedicated lines solely for accessing high-speed downloads would be included under the definition of telecommunication services but would not be taxable if outsourced from another state. (Private Letter Ruling No. 02-002, Louisiana Department of Revenue, April 1, 2002)


Effective January 1, 2003, the state sales tax rate on food for home consumption, electricity, natural gas and water sold for residential use will be reduced from 3.9% to 2% and will be eliminated as of July 1, 2003. Items such as bottled water, vitamins, ice, and alcoholic beverages are not included in the exemption and will remain taxable at the regular 4% rate. (Revenue Informational Bulletin 02-020, December 6, 2002)


The first purchase of a piece of equipment by an individual who holds a Federal Communications Commission (FCC) license is now exempt from sales tax. An exemption was enacted for digital television conversion equipment and digital radio conversion equipment, effective June 25, 2002. Taxpayers operating under several broadcaster licenses are allowed one exempt purchase of each piece of equipment per license. Subsequent purchases are subject to tax. (Sec.47:301 (16) (i))


An injunction is in place which prohibits the enforcement of Act 85(S.B 85). This Act allowed for a sales and use tax exclusion for any transaction involving the transfer of cellular/wireless phones or other equipment which was originally given away or sold below cost to sell a wireless service contract. The injunction was requested after a suit challenged the constitutionality of the Act. Wireless service providers and independent cellular retailers should file their state sales and use tax returns according to the law previous to the implementation of Act 85. Refund claims may be submitted for any amount of tax paid exceeding the requirements of Act 85. If Act 85 is found constitutional, refunds will then be processed. (Revenue Information Bulletin No. 02-015, Dept. of Revenue, Sales and Use Tax, 9/18/02)



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