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The Louisiana Tax Free Shopping Program has opened a refund center in Baton Rouge. The program provides a tax exemption in the form of a refund on most retail purchases made by international visitors to Louisiana. In order to qualify for the program, visitors must be travelling on a foreign passport with a current U.S. tourist visa and be staying in the country for less than 90 days. The sales tax refund is offered on tangible items purchased at tax-free stores then permanently removed from the United States. A sales tax refund is not offered for personal services including lodging and meals. When making a purchase, the individual must display his or her passport or current official picture ID and pay the entire purchase price, including the sales tax. The individual will then be given a voucher along with their receipt or invoice. The sales tax refund is paid in U.S. currency up to $500, and checks are issued on refunds over $500. Individuals can also obtain refunds via the mail. (Tax Topics, Louisiana Department of Revenue, September 27, 2011)

(11/14/2011)

In a sales and use tax opinion, the Attorney General of Louisiana has stated that bottled water is not exempt from sales and use tax. The sale of bottled water does not fit into the Louisiana sales and use tax exclusion for water “sold directly to the consumer for residential use.” That term includes the furnishing of natural gas, electricity, or water to private residences and for which residences are separately measured or metered. Bottled water also does not fit into the sales and use tax exclusion for “Water (not including mineral water or carbonated water or any water put in bottles, jugs, or containers, all of which are not exempted).” If water were to be treated as food, it still wouldn’t qualify for the exemption for food sold for preparation and consumption in the home. Bottled water does not require any preparation to be consumed in the home and thus does not qualify for the exemption. (Opinion No. 10-0296, Louisiana Attorney General, February 16, 2011)

(04/13/2011)

The Louisiana Department of Revenue has issued FAQs regarding the suspension of two policy statements pertaining to the taxability of digital transactions. The two policy statements that are suspended are Revenue Ruling No. 10-001 and Revenue Information Bulletin No. 10-015. The Department has clarified that sales and use tax will continue to be imposed upon the sale, use, or lease of canned computer software and software maintenance agreements. The suspension of Revenue Ruling No. 10-001 affects only those transactions in which the customer pays an access fee or subscription fee to use but not obtain ownership of a website or software. The suspension of Revenue Information Bulletin No. 10-015 affects only Pay-Per-View and Video-on-Demand movies purchased for viewing by cable and satellite television customers. The sale or use of digital downloads such as music, movies, books, or games remains a taxable transaction, as these transactions fall within the definition of tangible personal property. The rule in which this definition is found – LAC 61:I:4301 Tangible Personal Property – has not been suspended or repealed. (Revenue Information Bulletin No. 11-005, Louisiana Department of Revenue, February 14, 2011)

(04/13/2011)

New requirements have been added regarding contracts entered into with private agencies or auditing firms for the auditing of sales and use tax in Louisiana. Among the new requirements are the following: Upon the completion of an examination or audit for a taxpayer, providing audit leads by the private agency or auditing firm to other local collectors is prohibited by taxpayer confidentiality requirements. All taxpayer information obtained by the private agency or auditing firm for the audit or examination must be returned to the taxpayer, and the agency or firm shall not retain any copies of the information. All taxpayer related information generated by the agency or firm shall be delivered to the tax collector. The private agency or auditing firm must limit its functions. It is only allowed to audit the taxpayer’s books and records. It is not allowed to perform any assessment or collection of tax, as these are required to be performed by the local collector. Any individual performing an examination or audit for the private agency or auditing firm must have a lead auditor who has one of the following: an active CPA license, a Bachelor of Science degree with a minimum of 18 hours in accounting, or a certified tax examiner’s certificate issued by the Louisiana Association of Tax Administrators. If a private auditing firm conducts an audit, the taxpayer shall be given notice by the local tax authority advising them that the audit will be conducted by a third party agency and whether payment to the auditing firm is contingent on the collection of tax or is in any other way dependent on the audit outcome. (LA RS 47:337.26; Act 1029 (H.B. 845), Laws 2010, effective July 8, 2010).

(01/09/2011)

A department store operator with stores in Louisiana and other states is not liable for use tax on the printing costs of catalogs and other printed materials that are sent to its stores and customers located in Louisiana. Since the catalogs were sent directly to customers and Louisiana stores and not sent to the taxpayer for its use, the printing and shipping costs were deemed to be exempt from sales or use tax as an advertising service. In order for the advertising costs to be taxable, the catalogs would need to be transferred to the client for use by the client. Even though some of the catalogs were sent to stores owned by the taxpayer, it was determined that these were not deemed transferred to the purchaser for their own use. Actual transfer of the items by the advertising firm to the client for use by the client is a pre-requisite for a taxable basis. The decision in this case was also based on the decision in Louisiana Health Services, 746 So. 2d 285. (Bridges v. The Higbee Co. T/A Dillard’s, Louisiana Appellate Court, First Circuit, No. 2009 CA 1634, June 28, 2010))

(01/09/2011)

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