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Sales  & Use Tax Rules and Regulations 51-75

Rules 1-25
Rules 26-50
Rules 76-100
Rules 101-128
Rules Home
Subject Index

Rule 51. Automobile Refinishers and Painters
Rule 52. Barbers and Cosmetologists
Rule 53. Sales of Building Materials
Rule 54. Catalogs
Rule 55. Caterers
Rule 56. Computer Software
Rule 57. Contractors
Rule 58. Containers, Bags, Wrapping Paper, Etc.
Rule 59. Cold Storage
Rule 60. Dental Laboratories
Rule 61. Dentists
Rule 62. Dirt, Sand, and Gravel
Rule 63. Farm Equipment, Fertilizer, Farm Products' Containers, Seeds, Pesticides, Feed and Feed Additives, Livestock and Poultry, Farm Supplies
Rule 64. Fast Food Supplies
Rule 65. Finance Companies
Rule 66. Florists
Rule 67. Fuel Sales
Rule 68. Funeral Directors and Undertakers
Rule 69. Gold and Silver Bullion
Rule 70. Hospitals
Rule 71. Hotels and Tourist Camps
Rule 72. Human Organs, Bone, Skin, Blood, Cornea, Etc.
Rule 73. Ice
Rule 74. Jewelry Repair Shops
Rule 75. Labels, Tags, and Nameplates

Rule 51. Automobile Refinishers and Painters

Automobile refinishers, automobile painters, and automobile repair shops furnish repairs to tangible personal property. The entire amount charged for such services, including any charges for materials, parts used, and labor is subject to tax. Materials and parts purchased by such businesses which will become a part of the automobiles when refinished, repaired or painted, may be purchased under a Resale Exemption Certificate.

Rule 52. Barbers and Cosmetologists

Barbers and cosmetologists render personal services which are not taxable. They are consumers of the various items which are used or consumed in the rendition of their services. Sales of such tangible personal property to them are retail sales and subject to tax. If these persons sell beauty products to the public, they are required to register as dealers and collect the tax from their customers, but may purchase such products under a Resale Exemption Certificate.

Rule 53. Sales of Building Materials

Sales of materials and supplies to persons to be used in erecting, altering, improving, or repairing buildings or other improvements are sales to consumers and not sales for resale and are taxable. The seller of such materials must collect and remit the tax.

Rule 54. Catalogs

Catalogs distributed or mailed directly to Parish residents without charge are exempt from tax.

Rule 55. Caterers

A.     If a caterer prepares, furnishes or serves tangible personal property which is consumed on the caterer’s premises, those activities, whether billed as one item or billed separately, constitute a taxable sale.

B.     On the other hand, if a caterer prepares, furnishes or serves tangible personal property not consumed on the caterer's premises, the preparing and serving is not a part of the taxable sale if, and only if, a separate charge is made for the preparation and serving. If a lump sum bill is rendered, the entire amount thereof must be included in taxable sales. All consumables served by a caterer at the customer's premises or designated location are includable in taxable sales.

C.     Purchases by a caterer of such items as food, drinks, ingredients, and non-reusable food containers, plates, and eating utensils are purchases for resale if they become the property of the caterer's customer at the time meals are served. Purchases by a caterer of such items as tablecloths, napkins, cooking utensils, and equipment, which are not sold or delivered to customers, but are used by the caterer, are not purchased for resale and are taxable.

Rule 56. Computer Software

A.     Effective May 1, 1995, all computer software is "tangible personal property," whether considered "canned software" or "customized software."  Thus, transactions involving software are subject to tax regardless of the type and function of the software or whether transferred via diskette or other storage medium, via telephone lines, or by any other method.

B.     This section shall not be construed to include software developed by persons for their own use. Subsequent transfer of this software will be considered a retail sale and subject to sales tax. The sale of software developed for another person will be considered a retail sale and subject to sales tax.

C.     The purchase of a software program may contain many components. These components may contain some non-taxable services when considered individually. When purchasing a software package, all charges the customer is required to pay to acquire the software, except those specifically exempt, will be subject to sales tax. Any non-taxable services, such as personnel training and consultation services, are not subject to sales tax. If any non-taxable services are purchased from the same vendor at the time the software is purchased and billed on the same invoice as the software purchase, these services must be separately stated on the invoice or they will be subject to tax in the same manner as the software.

D.     The purchase of a maintenance agreement on computer software may contain many components. These components may contain both updates for the software and some non-taxable services. The modifications and updates for the computer software are considered subject to tax, as they represent additional tangible personal property purchased. Any non-taxable services, such as consultation services or personnel training, are not subject to tax as a purchase of tangible personal property. If any non-taxable services are purchased from the same vendor at the time the software is purchased and billed on the same invoice as the upgrades of the computer program, these services must be separately stated on the invoice or they will be subject to the tax in the same manner as the software.

Rule 57. Contractors

A.     Contractors and subcontractors are engaged in the business of 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 use tax on the purchase of those materials. Contractors must also pay sales and use tax on tools, equipment, and supplies purchased and used in their business.

B.     Contractor-Dealers - Contractors and subcontractors engaged in the business of erecting, building or otherwise improving, altering or repairing real property for others may also be engaged in the retail business of selling materials and supplies to other contractors, consumers or users. If, at the time of his purchase of materials and supplies, the contractor is unable to segregate that portion of the materials and supplies he will sell at retail from that portion which he will use or consume in the fulfillment of his contracts, he should furnish a Resale Exemption Certificate to the seller of the materials and supplies. The contractor or subcontractor purchasing on a Resale Exemption Certificate must include in his gross sales upon which the tax is to be computed, all proceeds from his retail sales. In addition, he must report and pay tax on all materials he uses in the performance of his contracts, based on his cost price of such materials and supplies.

  1. When the contract with the customer is expressed in terms of a sale of certain materials at a stipulated price, plus a charge for installation, the contract is considered a retail sale subject to tax to the extent of the stipulated price.

  2. When the contract is expressed in terms of a sale of certain materials, coupled with an obligation to install them for a lump sum charge, the entire charge is considered the selling price and is subject to tax.

  3. Those contractors whose operations are covered by this rule must register as retail dealers and are required to furnish their registration number when signing a Resale Exemption Certificate.

C.     Contracts Financed by the Federal Government - The sale of materials, supplies, equipment or other items of tangible personal property to a contractor although on a cost-plus, cost-plus fixed fee or lump sum contract with the Federal Government, wherein the contractor will be reimbursed by the Federal Government with a Federal Government check, is taxable and the seller is required to collect from the contractor and remit the taxes due. It is immaterial that part or all the funds by which payment is made by the contractor may have been advanced, granted, loaned or paid to the contractor by the Federal Government.

(See also Rule 7.)

Rule 58. Containers, Bags, Wrapping Paper, Etc.

A.     The sale or purchase of items actually accompanying the products sold to the ultimate consumer, without which the delivery of the products is impracticable on account of the character of the contents, and for which there is no separate charge, is not subject to tax. These items include such things as grocery bags, cans or bottles in which goods, paints, and other commodities are contained; medicine bottles; boxes in which jewelry, candy, etc., are delivered to a consumer; ice cream cartons and cones; milk bottle caps; labels or nameplates affixed to products manufactured; and printed matter containing only directions for use when it is impracticable to affix such printed matter to the article sold.

B.     When container materials, such as crating, packing cases, excelsior, bale bindings, and the like are used in connection with the preparation for sale of other tangible personal property, and these materials do not pass to the ultimate consumer together with the tangible personal property originally contained therein, the sale of such materials is considered a purchase for resale, provided the seller receives a Resale Exemption Certificate from his customer.

C.     Whenever tangible personal property is sold in barrels, bottles, boxes, bags, kegs, drums, cartons, sacks, cans, or other containers, the title to which is retained by the seller of the tangible personal property contained therein and which are to be returned to the seller and are tendered by the seller to provide merely a means of containing such tangible personal property while in the process of being delivered or conveyed to the purchaser for use or consumption, then the sale to the seller using such containers is a taxable sale at retail.

D.     Sales of boxes, twine, tape, and similar articles to persons engaged in rendering services, who use such articles in connection with the services rendered, who make no separate charge thereof and who are required to collect the tax upon the receipts from such services, are sales for resale. For example, sales of plastic wrap and twine to a dry cleaner or laundry are sales for resale and should be made under a Resale Exemption Certificate, since such materials pass to the consumer along with the taxable service.

E.     Sales of wrapping paper, boxes, ribbons, and bows to sellers of tangible personal property for use in gift-wrapping services are considered sales for resale and should be made under a Resale Exemption Certificate.

F.    When gift-wrapping services are provided in connection with the sale of tangible personal property and no separate charge is made, no tax is due. When a separate charge in connection with the sale of tangible personal property is made for gift-wrapping services, the entire charge is considered to be a charge for the sale of tangible personal property and is taxable.

G.    When the gift-wrapping service is not rendered in connection with the sale of the tangible personal property being wrapped, only the separately stated charge for gift-wrapping materials is subject to sales tax and the separately stated labor and service charge is not taxable. If no separation of charges is made, the entire charge is considered to be for the sale of tangible personal property and is taxable.

Rule 59. Cold Storage

Charges for the service of furnishing cold storage space and for the service of providing tangible personal property for cold storage, when such service is incidental to the operation of cold storage facilities, are subject to tax. Cold storage space means any enclosed space in which the temperature and/or humidity are regulated and controlled.

In order for sales tax to apply to charges for furnishing cold storage space, the provider of the cold storage space must guarantee that the temperature of the cold storage facility will be maintained at a temperature suitable for the preservation and storage of perishable items to be maintained in the facility. Generally, the owner of the facility must guarantee that the temperature will be maintained below the normal building temperature.

The taxability of charges for the use of climate-controlled, self-service storage facilities depends upon the terms of the contract. Charges for the use of a climate-controlled, self-service storage unit will only be taxable if the contract between the owner of the unit and the lessee of the unit guarantees that the temperature of the unit will be maintained below the normal building temperature and at a level necessary to maintain or preserve perishable items. In the alternative, charges are not taxable where the contractee receives a key to a specific unit and may place or remove items at their own discretion, and where there is no guarantee to maintain the temperature of the unit below the normal building temperature.

Rule 60. Dental Laboratories

According to Act 1065, 1991, orthotic and prosthetic devices, prostheses and restorative materials sold to and utilized by dentists are exempt from sales and use tax. Sales of other tangible personal property to dentists or other businesses that are not specifically exempt are taxable.

Rule 61. Dentists

A dentist is the consumer of tangible personal property which he uses in the practice of his profession. According to Act 1065, 1991, orthotic and prosthetic devices, prostheses, and restorative materials utilized by or prescribed by a dentist are exempt from sales and use tax.

Purchases of other tangible personal property, including dental chairs, motors, instruments, x-ray machines, drilling machines, office furniture, and equipment, are subject to sales and use tax.

Rule 62. Dirt, Sand, and Gravel

Dirt, sand, and gravel are tangible personal property after they have been severed from the land; therefore, the sale thereof is subject to tax. The tax is measured by the sales price of the dirt, sand or gravel, which includes all charges made in connection with the sale, but does not include separately stated charges for hauling or delivery. If the dirt, sand or gravel is used by a contractor, the contractor would owe either a sales or use tax on the sales price or cost price of any dirt, sand or gravel purchased and other charges made, including loading or hauling. If the contractor severed and used dirt, sand or gravel owned by him, there would be no tax due.

Rule 63. Farm Equipment, Fertilizer, Farm Products' Containers, Seeds, Pesticides, Feed and Feed Additives, Livestock and Poultry, Farm Supplies

A.     Farm equipment, machinery, farm tools, and other items purchased by farmers for use or consumption are subject to tax unless specifically exempted. Specifically exempted from tax are purchases of fertilizer; containers used for farm products; feed and feed additives purchased for the purpose of sustaining animals held primarily for commercial business or agricultural use; pesticides; seeds for use in the planting of crops; and livestock, livestock products, poultry products, and farm, range and agricultural products when produced by the farmer and used by him and members of his family.

B.     The word "fertilizer" means what is commonly known in the "trade" as commercial fertilizer and means a substance which increases the plant food content and as a result, becomes a part of the product grown.

C.     The exemption for feed and feed additives does not apply to such purchases for pets, hunting dogs, or any animal kept primarily for personal, sporting or other purposes.

D.     The word "pesticide" means any preparation useful in the control of insects, plant life, fungus, or any other pest detrimental to agricultural crops, including the control of animal pests and diseases that meets the definition of a pesticide in accordance with the Department of Agriculture and Forestry of the State of Louisiana under Louisiana Revised Statute 3:3202. Qualifying pesticides must be registered with the U.S. Environmental Protection Agency and must carry a valid Federal Insecticide, Fungicide, and Rodenticide Act number. Pesticides include, but are not limited to, insecticides, herbicides, fungicides, crop oils, surfactants, adjuvants, emulsions, soaps, and drift agents. The exemption for pesticides does not include pesticides used for private family vegetable gardens or in protecting ornamental plants used in landscaping.

E.     Only seeds planted in a sufficient quantity to result in a harvest of recognized commercial value, depending upon the product being planted, qualify for exemption. The exemption does not cover the planting of a garden to produce food for personal consumption by the planter or his family or seeds used in planting for landscape purposes, unless the planter is in the business of harvesting the plants and selling them in a commercial market.

Rule 64. Fast Food Supplies

A.     The containers used by fast food businesses, which actually accompany the products sold to the consumer without which the delivery of such products is impractical on account of the character of the contents, and for which there is no separate charge, are not subject to tax. These items are purchased for resale. Such containers include, but are not limited to, trays, cups, cup lids, cardboard and styrofoam containers, hash brown and french fry containers, and paper bags.

B.     Napkins, straws, forks, salt and pepper packets, ketchup packets, stir sticks, and other items which accompany the primary items sold, and for which there is no separate charge, are not subject to tax and may be purchased by the business under a Resale Exemption Certificate.

Rule 65. Finance Companies

A.     Finance companies are engaged primarily in the business of financing or acquiring promissory notes given by purchasers of automobiles, furniture, refrigerators, or other items of tangible personal property. For the repayment of such notes, they sometimes take as security chattel mortgages or other security upon such tangible personal property. When the purchaser fails to meet his obligation, the finance company repossesses the property and sells it to satisfy the obligation evidenced by the notes. These sales are subject to tax.

B.     When financing companies acquire title to such tangible personal property and engage in the business of selling and/or renting such property, the sales or rentals thereof are taxable.

Rule 66. Florists

A.     Florists are engaged in the business of selling tangible personal property at retail and all such sales are subject to tax.

B.     When florists conduct transactions through a florists' telegraphic delivery association, the following applies:

  1. On all orders taken by a florist in this Parish and telegraphed to another florist in Louisiana for delivery in Louisiana, the florist located in this Parish shall collect and remit the tax;

  2. On all orders taken by a florist in this Parish and telegraphed to another florist located outside Louisiana for delivery of flowers to a point outside of Louisiana, the florist located in this Parish shall collect the tax; and

  3. When a florist in this Parish receives telegraphic instructions from a florist located outside the Parish for delivery of flowers in this Parish, there is no tax due with respect to the receipts realized by the florist located in this Parish.

C.     When a nursery owner or florist sells shrubbery, young trees or similar items, and, as a part of the transaction, transplants them to the land of the purchaser for a lump sum or a flat fee, the nursery owner or florist is considered the consumer of the shrubbery, trees or similar items and owes tax on the cost price of such items.

D.     Tax does not apply to charges for the maintenance of live plants.

Rule 67. Fuel Sales

Unless specifically exempted by the ordinances, sales of coal, coke, fuel oil, and other combustibles, whether sold in carload lots or other quantities to persons who use or consume such substances in producing other tangible personal property or in the rendering of service, are taxable. The coal, coke, fuel oil or other combustibles do not physically enter into or become a constituent component or integral part of tangible personal property, and hence, are sold for use or consumption rather than for resale.

Refinery gas used for any purpose is taxable after September 12, 1990. Prior to September 12, 1990, refinery gas was taxable only if used for boiler fuel.

(See also Rule 85 concerning Liquefied Gas and Rule 92 relative to Refinery Gas.)

Rule 68. Funeral Directors and Undertakers

A.     When funeral directors and undertakers charge lump sums to customers covering the entire cost of the funeral, without separating the charge for tangible personal property and the charge for services, the full amount of the funeral bill, less any cash advanced for purposes such as the purchase of a cemetery lot or grave, opening and closing a grave, other cemetery expenses, remuneration of a minister, choir, use of a church, press notices or other cash advanced, shall be reported and tax paid on 50 percent of the total bill, less cash advanced.

B.     Funeral directors and undertakers are considered to be the users or consumers of such articles as embalming fluid, cosmetics, chemicals, furniture, equipment, funeral home furnishings, advertising, calendars, booklets, motor vehicles and accessories, embalming equipment and instruments, grave equipment, stretchers, baskets and other items which are used or consumed in the operation of the business and the title and possession to which are not passed on to customers. Sales of such items to the funeral director or undertaker are taxable retail sales.

Rule 69. Gold and Silver Bullion

The sale of monetized bullion, including platinum, gold or silver bullion, having a total value of $1,000 or more is not subject to tax. "Monetized bullion" means gold, silver or numismatic coins or other forms of money manufactured from gold, silver, or other metals and used as a medium of exchange under the laws of Louisiana, the United States or any foreign nation.

Rule 70. Hospitals

A.     Hospitals, chemical dependency units (c.d.u.), and mental health facilities are primarily engaged in the business of furnishing non-taxable services. However, they are consumers or users of all tangible personal property purchased for use or consumption by them in connection with the operation of the institution and sales of such tangible personal property to them are taxable. Purchases of the following tangible personal property are exempt from the 1/2% Sewer Improvement tax, the 1/2% Street Improvement tax, and the 1% Educational Facilities Improvement District tax.

  1. Purchases of drugs, medicine or ingredients thereof, ostomy, ileostomy or colostomy devices.

  2. Effective January 1, 1998, purchases of orthotic and prosthetic devices, medical devices, and patient aids.

  3. Effective January 1, 1998, purchases of food to be used for preparation of staff and patients' meals are exempt from 5% local tax.

B.    If a hospital, chemical dependency unit (c.d.u.) or mental health facility operates any division that sells tangible personal property or taxable services, such as a pharmacy, pay parking facility, coffee shop, gift shop, and supplies of any nature, then the hospital, c.d.u. or mental health facility becomes a dealer and must register, collect, and remit tax upon all such sales.

(See also Rule 79 regarding cafeteria sales.)

Rule 71. Hotels and Tourist Camps

A.     The furnishing of rooms by hotels and tourist camps is a taxable service.

B.     The term "hotel" or "tourist camp" means any establishment engaged in the business of furnishing sleeping rooms, cottages or cabins to tourists or other transient guests when the number of guest sleeping rooms, cottages or cabins at a single location is six or more. The classification is determined by the type of guest accommodated and the number of units at each location. Whether cooking and eating facilities are furnished is immaterial.

C.     If an establishment contains less than six sleeping rooms, cottages or cabins, the tax does not apply.

D.     The tax applies only to charges made to transient guests. Whether the guests of a particular establishment are transient guests must be determined on the basis of the facts in each case. A guest who pays for a room by the month and who resides in the establishment for 60 consecutive days shall be considered a permanent guest and the tax would not apply. In addition, the tax does not apply to rooms rented on an annual contract basis.

E.     When an establishment provides facilities for both transient and permanent guests, the facilities for the permanent guests are not included in determining the status of the establishment. For example, if there are eight sleeping units furnished to transient guests and ten apartments for permanent guests, the establishment constitutes a hotel or tourist camp, since more than six of the rooms are furnished to transient guests.

F.     Government employees are not exempt from sales tax. However, rooms billed and paid directly by federal, state or local governments are not subject to sales tax.

G.     The tax does not apply to charges for meeting rooms or rooms provided on a complimentary basis.

Rule 72. Human Organs, Bone, Skin, Blood, Cornea, Etc.

The term "sale at retail" does not include the sale of any human tissue transplants which are defined to include all human organs, bone, skin, cornea, blood, or blood products transplanted from an individual into another individual, and such human tissue transplants are not sales at retail.

Rule 73. Ice

Sales of ice by manufacturers and wholesalers to retail dealers who are engaged in the retail business of selling ice to users or consumers and have an established place of business are sales for resale and not subject to tax. All other sales of ice to consumers or users are subject to tax.

Rule 74. Jewelry Repair Shops

A.     Jewelry repair shops primarily repair tangible personal property such as watches, clocks, and jewelry, which are taxable services. Sales by supply houses to jewelry repair shops of articles of machinery, equipment, and supplies used or consumed incidentally in the rendering of such services, but which do not become part of the articles repaired, are taxable retail sales. Sales of materials and supplies, such as springs, crystals, jewel staffs, gold, silver, and similar articles, which become a part of the articles repaired, are sales for resale and may be purchased with a Resale Exemption Certificate.

B.     Sales by jewelry repair shops of watches, watch chains and straps, clocks, pins, rings, jewelry, and other tangible personal property are taxable retail sales. Sales of such articles by supply houses to jewelry repair shops are sales for resale and are not taxable.

C.     Engraving services provided by jewelry repair shops are subject to sales tax as a fabrication of tangible personal property.

Rule 75. Labels, Tags, and Nameplates

A.     Sales of labels, tags or nameplates to a manufacturer who affixes them to products manufactured by him constitute sales for resale if such labels, tags or nameplates become affixed to or are an integral and necessary part of the final product sold, such as labels required by law in the sale of certain drugs and chemicals or metal nameplates of manufacturers permanently attached to automobiles, appliances, and the like.

B.     When labels and tags, such as price or shipping tags, do not become a part of the product sold, the manufacturer or other person affixing them is deemed to be the purchaser for use or consumption and the sales to him are taxable.

Rules 76-100