Tax Facts Index
EAST BATON ROUGE PARISH
Department of Finance
Vol. 9, No. 2
Use tax transactions
As part of the Total Quality Management (TQM) process, the City of
Baton Rouge Auditing Division sampled its 1997 sales/use tax audits to identify the
most common taxpayer mistakes. The most common audit issues are:
Failed to pay use tax on taxable purchases.
Charged sales tax to customers incorrectly.
Collected taxes and did not remit them to the City-Parish.
Paid tax on non-taxable items (refund audits).
Mathematical errors occurred when the tax return was prepared.
Because Use Tax consisted of over half of our audit findings in 1997,
we will discuss this tax compliance problem in this issue of Tax Facts.
Most retail dealers are familiar with the collection and payment
responsibilities for sales tax purposes. Dealers collect sales tax on certain retail sales
of tangible personal property and the sale of certain services. They remit these taxes
directly to the City-Parish. However, many retail dealers are not aware of their
responsibilities for use tax purposes. Dealers that are not familiar with use tax
requirements may have a substantial tax liability. The purpose of this article is to
advise dealers of basic use tax requirements.
Use tax applies to tangible personal property purchased for use,
consumption, distribution or storage for use in this Parish. Use tax is due only when a
sufficient local sales tax has not been paid on the purchase. The use tax does not apply
to property on which a local sales tax of at least 4% has been paid. Nor does a use tax
apply to property which is exempt from sales tax. The purpose of the use tax is to insure
that all articles of tangible personal property used in this Parish are uniformly taxed,
regardless of where the items may have been purchased. It is based on the actual cost or
the reasonable market value, whichever is less. All purchases subject to use tax must be
reported on line 14 of the Sales and Use Tax Report.
Situations in which local sales tax is frequently not paid include:
Purchases from out-of-parish vendors or out-of-state vendors. These
vendors may not be registered to collect our tax when such purchases are delivered in this
Items purchased for resale taken from inventory for use by the
Some examples of items which are frequently subject to use tax because
local sales tax has not been paid include:
Office furniture, equipment, computers and supplies.
Advertising specialty items such as T-shirts, caps, pens/pencils, and
Construction tools, equipment and materials purchased by contractors
Items purchased for lease or rental purposes.
Tools and equipment purchased by repair dealers.
Medical tools, equipment and supplies purchased by physicians,
dentists, and hospitals.
Items ordered from out-of-parish or out-of-state catalog companies.
Property which is purchased for resale is not subject to use tax.
It is very difficult to discuss all aspects of use tax transactions in
this newsletter. If you have any questions, contact the City-Parish Revenue Division.
Sales tax due dates
Following are the sales tax due dates for the second quarter of 1998:
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.
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
Assistant Revenue Manager
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., Monday - Friday.
Occupational License Tax
Business License and Permit Office