The State of Louisiana has issued a final rule under the authority of R.S. 47:301 and R.S. 47:511. This rule amends LAC 61:I.4301 related to the definition of cost price, lease or rental, and sales price. The amendment states that under R.S. 47:301(3)(i), machinery and equipment is excluded from cost price if the property is used to manufacture tangible personal property for sale to another or is used directly in the production, processing, and storing of food, fiber, or timber for sale; is used predominantly and directly in the manufacturing process or in the actual manufacturing for agricultural purposes; and is eligible for depreciation for federal income tax purposes. The exclusion is subject to a phase-in from July 1, 2004 to June 30, 2010. This phase-in will be based on the state’s budgetary review. For the exclusion to apply a business must have been assigned by the Louisiana Department of Labor, North American Industrial Classification System codes within the agricultural, forestry, fishing, and hunting Sector 11 or the manufacturing Sectors 31 through 33 as existed in 2002. Any businesses that do not meet these qualifications are not able to utilize the benefits of the exclusion. The rule further states that machinery and equipment if used in the above qualifying matters is excluded from cost price, which includes the cost for a lease or rental of such equipment. The rule also provides definitions of direct use and qualifying machinery and equipment. (Final Rule; RULE; Department of Revenue; Policy Services Division, Louisiana Department of Revenue, March 20, 2005)