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The taxpayer believed that their manufacturing of covers to be applied to their customer's rolls of paper constituted manufacturing and should therefore be exempt. However, it was ruled that the re-covering of rolls used in the paper manufacturing was viewed more as a repair of tangible personal property and hence was considered a taxable transaction. (Louisiana Court of Appeal, Second Circuit, No. 36,100-CA, June 14, 2002)


The sales tax rate for food used for home consumption, electricity, water utility services, and steam has been lowered from 4% to 3.9%. This does not include items such as alcoholic beverages, water in containers, vitamins, and ice. This new rate takes effect as of July 1, 2002. (LA Department of Revenue web site, Revenue Informational Bulletin 02-010, June 27, 2002)


The Louisiana Department of Revenue has issued an emergency rule to define tangible personal property in regards to the sale or purchase of customized computer software. The law states that the sale or purchase of custom computer software from July 1, 2002, to July 1, 2005 is partially exempt, and after July 1, 2005 will be completely exempt. The exemption applies to both the 3.97% state tax and the .03% tourism tax, totaling 4%. This exemption does not apply to local parish sales and use taxes. Beginning July 1, 2002 the exemption will be phased in at the rate of 25% (75% taxable) per year and will increase by 25% in subsequent years on July 1 of that year, until it is 100% exempt by July 1, 2002. (LAC 61:I.4301.C.Tangible Personal Property)


A corporation’s use of independent contractors for computer repair services completed on-site was not enough substantial nexus to qualify for taxation. (Quantex Microsystems, Inc., Louisiana Court of Appeal, First Circuit, No. 2000 CA 0307, July 3, 2001.)



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