NEW LAWS AFFECT SALES AND USE TAX

The Louisiana Legislature enacted several measures affecting local sales and use taxes during its 2001 Regular Session. These measures include:

Act 13 (HB 923) - Provides that the lessor of a motor vehicle is responsible for remitting all sales and use taxes to the proper taxing jurisdiction (effective 8/15/01).

Act 60 (HB 730) - Excludes from local sales/use tax the sale, lease, or rental of tangible personal property covered under the provisions of Medicare (effective 7/1/01).

Act 874 (HB 1075) - Excludes from local sales/use tax the acquisition and distribution of telephone directories distributed free of charge by advertising companies not affiliated with telephone service providers (effective 6/26/01).

Act 1140 (SB 193) - Authorizes a court to allow a taxpayer to post a commercial bond or other security in lieu of payment under protest (effective 6/29/01).

Baker Increases its Sales and Use Tax

On May 5, 2001, the voters in the City of Baker approved a 1/2% sales and use tax rate increase. This tax is only applicable to taxable transactions occurring within the incorporated city limits of Baker, including property delivered into the city. Proceeds from this tax will be used for pay increases for Baker Police and Fire personnel. Sales of food for home consumption, sales of prescription drugs, and medically related items are subject to the additional 1/2% sales and use tax. As a result, the total local sales and use tax in the City of Baker will increase from 5% to 5-1/2% effective October 1, 2001.

New Sales and Use Tax Forms

As published in the July 2001 issue of "Tax Facts," the Revenue Division has implemented its digital imaging system. As a result, we will no longer be able to accept photo copies, fax copies, spreadsheets, and tax service prepared forms. In addition to receiving your second set of revised forms, we have also enclosed a worksheet which should be utilized in preparing your return. Please contact this office if you require additional worksheets or you may download the worksheet and Sales and Use Tax Report form instructions.   You can also request a new Sales and Use Tax Report form online.

Finance Department Sponsors Seminar for Taxpayers

The Finance Department will sponsor a tax seminar on Friday, November 16, 2001, to address general sales and use tax issues and implementation of the new 1/2% Baker sales tax. Representatives from the State of Louisiana Department of Revenue, Ascension Parish Tax Authority, Livingston Parish School Board, and West Baton Rouge Parish Department of Revenue will also be in attendance.

Individuals interested in attending can contact the Revenue Division to register or visit the Finance Department web site to register on-line. The deadline for registration is November 1, 2001, and seating is limited, so please register early. If you have a question or topic concerning sales and use tax that you would like to have discussed, please fax it to the attention of Steve Thomas or send an e-mail to sthomas@brgov.com The registration session will begin at 8:30 a.m. followed by the seminar program starting promptly at 9:00 a.m.

Tax Seminar Questions and Answers

On August 18, 2000, the Finance Department sponsored the 4^th Annual Sales and Use Tax Seminar to discuss general sales and use tax issues. Many of the participants at the seminar submitted questions for the panel to address. Since all of the questions could not be answered during the seminar, we have provided answers to all the questions. Responses to the questions have been provided from both the East Baton Rouge Parish Finance Department and the State of Louisiana Department of Revenue.

Tax Liability of Contractors and Sub-contractors

Several participants of the tax seminar submitted questions concerning the sales and use tax liability of contractors and sub-contractors. The tax liability of contractors and sub-contractors is addressed in Rule 57 of the
Sales and Use Tax Rules and Regulations.

Contractors and sub-contractors are engaged in constructing, erecting, building or otherwise improving, altering or repairing real property such as buildings, highways, roads or other structures. Contractors provide labor and material to improve real property and are not liable for the collection of sales taxes on their contracting revenues. Contractors are treated as the ultimate consumer of materials which become affixed to real property and on other articles of tangible personal property used or consumed by the contractor in performing the contract. The contractor must pay sales and/or use tax on the purchase of those materials. Contractors must also pay sales and/or use tax on tools, equipment, and supplies purchased and used in their business.

Sales Tax Due Dates
Following are the sales tax due dates for the fourth quarter of 2001:

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

Taxpayer Topics

The Tax Facts Newsletter is issued quarterly by the Department of Finance/Revenue Division.  Our mission is to provide taxpayers with 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 send these items to:

City of Baton Rouge - Department of Finance
P. O. Box 2590
Baton Rouge, LA  70821-2590
ATTENTION:  Steve Thomas, Assistant Revenue Manager
or send e-mail to sthomas@brgov.com

Need Assistance?

If you need assistance, help is just a phone call away.   Taxpayers may call the Revenue Division and speak with a member of our staff at the following telephone numbers between the hours of 8 a.m. and 5 p.m., Monday - Friday.

Proud Member of the Louisiana Association of Tax Administrators