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Tax Facts Vol. 8, No. 2

Tax Facts Index

TAX FACTS

EAST BATON ROUGE PARISH

Department of Finance

Vol. 8, No. 2

April 1997

Sales for resale of repair services

Our current Sales and Use Tax Ordinance defines "sale at retail" to mean "a sale to a consumer or to any person for any purpose other than for resale in the form of tangible personal property and a sale of services..." It has been the position of the Revenue Division that the sales of tangible personal property and the sales of services, when sold for resale, are exempt from local taxation. The presentation of a valid and properly executed exemption certificate by the purchaser to the seller is required in order to properly document a sale for resale.

The furnishing of repairs to tangible personal property is identified in the definition of "Sales of Service". This means that a repair dealer could perform repair services for a customer and have those services declared exempt from local taxes by the presentation of a valid exemption certificate by the customer. For example:

Hiho Car Dealership has taken in a wrecked vehicle to be repaired. Because the dealership has taken in too many vehicles for repair, they contact ABC Auto repair shop to repair this particular vehicle for them. Hiho provides ABC with a resale exemption certificate. ABC performs the repair work and charges Hiho state sales tax only on the invoice. ABC also declares the net amount of the invoice on line two (2) of our sales tax return. Hiho will collect the applicable state and local sales tax on their invoice to the owner of the vehicle.

Normally, repair services are taxed where the service is performed, even if the repaired property is delivered into another jurisdiction. The exception to this is when the repair is for resale. For example:

Stuck Valve, Inc. is a valve repair shop located in Livingston Parish. Stuck Valve sends a valve to XYZ Valve located in East Baton Rouge Parish to be repaired. Stuck also provides XYZ with a resale exemption certificate and declares that this repair is for resale. Because Stuck has declared the repair exempt, XYZ will not charge any local tax even though the repair work is performed in East Baton Rouge Parish. Stuck Valve, Inc. will collect tax from customer when the repaired valve is picked up in Livingston Parish.

In summary, repairs can be performed for resale but must be in strict compliance with the Rules and Regulations regarding Resale Exemption Certificates. Resale exemption certificates may be obtained from the Revenue Division.

Street Improvement Tax Election

On May 3, 1997, the voters of East Baton Rouge Parish will decide whether or not to renew the 1/2% sales and use tax for street improvements. The renewal is for a period of five (5) years commencing on July 1, 1997, through and including June 30, 2002. Proceeds from the tax will be used for repair and improvement of public roads and streets, for the widening and improvement of existing public roads or streets and the construction of new public roads and streets.

The tax if renewed will continue to be levied upon the sale at retail, use, consumption, distribution, lease or rental of tangible personal property, and sales of services. The sale of prescription drugs, food for further preparation and consumption in the home, orthotic and prosthetic devices, wheelchairs, medical devices, and patient aids that are prescribed by a physician or licensed chiropractor and are for personal consumption or home use will continue to be exempt from this 1/2% tax.

If the voters approve the 1/2% Street Improvement sales and use tax, the Local sales and use tax rate will remain 4%.

Sales tax due dates

Following are the sales tax due dates for the second quarter of 1997:

For the

Tax Due

Delinquent

Month of

Date

Date

April

May 1

May 21

May

June 1

June 21

June

July 1

July 22

Returns bearing a U.S. postmark on or after the above delinquent dates will be assessed penalty, interest and loss of vendor's compensation. Remember to mail your return early.

Taxpayer topics

Tax Facts is issued quarterly by the Department of Finance/Revenue Division to provide information concerning developments and policies regarding the collection of local sales tax within East Baton Rouge Parish.

The Revenue Division invites any suggestions, questions or comments that you would like addressed in future issues of Tax Facts. Please address these items to:

City of Baton Rouge
Department of Finance
P. O. Box 2590
Baton Rouge, Louisiana 70821-2590
ATTENTION:
Steve Thomas
Assistant Revenue Manager

Need help?

Taxpayers may call the Revenue Division to receive assistance at the following telephone numbers between the hours of 8 a.m. and 5 p.m., weekdays.

Sales/Use Tax

(225) 389-3084

Occupational License Tax  

(225) 389-3278

Business License and Permit Office

(225) 389-3278

Fax Number  

(225) 389-5369