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Regular Session, 2010
SENATE BILL NO. 458
BY SENATOR N. GAUTREAUX
REVENUE DEPARTMENT. Increases the contract price which requires nonresident
contractors to register with the Department of Revenue and provide surety for the payment
of state and local tax from $3,000 or more to the same amount or more which would require
the nonresident contractor to register with the State Licensing Board for Contractors and
grants local sales tax collectors authority to require surety and enforce it for nonresident
contractors not registered with the department (8/15/10)
AN ACT1
To amend and reenact R.S. 47:9(A)(1), the introductory paragraph of 306(D)(1), and2
306(D)(3), and 337.18(C), relative to a nonresident prime contractor; to provide with3
respect to registration and bond; to provide with respect to returns and payment of4
taxes; to provide for an effective date; and to provide for related matters.5
Be it enacted by the Legislature of Louisiana:6
Section 1. R.S. 47:9(A)(1), the introductory paragraph of 306(D)(1), and 306(D)(3)7
and 337.18(C) are hereby amended and reenacted to read as follows: 8
§9. Collection of taxes from nonresident contractors and subcontractors;9
registration; bond10
A.(1) To the end that the state of Louisiana and the political subdivisions11
thereof may receive all taxes due in every instance, including contributions due12
under the Employment Security Law, contractors and subcontractors who are13
nonresidents of this state, desiring to engage in, prosecute, follow or carry on the14
business of contracting as defined in this Section shall register with the secretary of15
the Department of Revenue for each contract where the total contract price or16
compensation to be received amounts to more than three thousand dollars the same17 SB NO. 458
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amount, or in excess of the amount, which would require the nonresident1
contractor to register with the State Licensing Board for Contractors. The2
secretary of the Department of Revenue shall charge a fee for such registration in an3
amount of ten dollars for each such contract. All such fees received by the secretary4
of the Department of Revenue shall be deposited with the state treasurer. The state5
treasurer shall thereupon credit the amount of said fees to the State General Fund.6
* * *7
§306. Returns and payment of tax; penalty for absorption8
* * *9
D. Registration by nonresident prime contractor. (1) Prior to commencing10
work on any construction contract which in the aggregate exceeds three thousand11
dollars, any nonresident prime contractor, as defined in R.S. 47:9(A)(2), required to12
be registered in accordance with the provisions of R.S. 47:9(A)(1) shall:13
* * *14
(3) Within thirty days of the completion and acceptance of the contract15
project, the prime contractor shall submit to the department, on a form provided or16
approved by the department, a complete and accurate accounting of all state sales and17
use taxes which became due as a result of the contract for all contracts required to18
be registered in accordance with the provisions of R.S. 47:9(A)(1). In the event19
that there are additional taxes due, they shall be submitted with the accounting.20
* * *21
§337.18. Returns and payment of tax; penalty for absorption 22
* * *23
C. Registration by nonresident prime contractor. (1) Prior to commencing24
work on any construction contract which in the aggregate exceeds three thousand25
dollars, any nonresident prime contractor, as defined in R.S. 47:9(A)(2) who is not26
registered pursuant to the provisions of R.S. 47:9 and 306(D), shall:27
(a) Register the contract with the Department of Revenue in accordance with28
the provisions of R.S. 47:9(A)(1) and obtain a certificate in a form to be determined29 SB NO. 458
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by the secretary, which certificate shall identify the construction project registered1
and recite the total amount of the contract.2
(b) In the event the contract amount equals or exceeds fifty thousand3
dollars, and at the option of the collector, file with the department collector of sales4
and use taxes of the parish in which the contract is to be performed a surety bond5
or a blanket surety bond for all contracts, sufficient to cover all taxes due on the6
contract or contracts, in accordance with the provisions of R.S. 47:9(B)(1). For7
purposes of this Paragraph, such collector shall have the same authority as the8
secretary in R.S. 47:9(B) with respect to the surety bond.9
(c)(b) Register the contract with the such collector of sales and use taxes of10
the parish in which the contract is to be performed. The collector shall issue a11
certificate in a form determined by the secretary, following the requirements in12
Subparagraph (a) of this Paragraph, which certificate shall identify the construction13
project registered and recite the total amount of the contract and which shall14
certifying certify that all requirements for surety bonds established by R.S. 47:306(D)15
and this Subsection applicable to the location of the project have been met.16
(2)(a) No state entity, including but not limited to the office of the state fire17
marshal, or local governing authority charged with the responsibility of issuing any18
permit, license, or certificate necessary for the lawful commencement of any19
construction contract subject to the provisions of this Subsection, shall issue such20
permit, license, or certificate until sufficient proof of possession of the certificates21
obtained as provided in this Subsection for that project is shown by the applicant.22
(b) Any person failing to execute any bond herein provided before beginning23
the performance of any contract shall be denied the right to perform such contract24
until he complies with such requirements. The secretary of the Department of25
Revenue and/or the collector of sales and use taxes shall have the right to enjoin the26
performance of the contract until a satisfactory bond is executed and filed, and the27
secretary or collector may also impose a penalty for commencing of two hundred28
dollars or two percent of the construction contract, whichever is greater.29 SB NO. 458
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(3) Within thirty days of the completion and acceptance of the contract1
project, the prime contractor shall submit to the Department of Revenue and/or2
collector, on a form provided or approved by the department or collector, a complete3
and accurate accounting of all state and local sales and use taxes which became due4
as a result of the contract. In the event that there are additional local taxes found to5
be due in a final accounting required pursuant to the provisions of R.S. 47:9 or6
306(D), the contractor shall submit a copy of the accounting and the additional tax7
due to the taxing authority.8
(4) The secretary of the Department of Revenue shall promulgate such rules9
and regulations and may have printed such forms as are necessary to effectuate the10
provisions of this Subsection.11
(5) Nothing herein shall be construed so as to affect the licensing requirements12
of R.S. 47:341 et seq.13
* * *14
Section 2. This Act shall become effective upon signature by the governor or, if not15
signed by the governor, upon expiration of the time for bills to become law without signature16
by the governor, as provided by Article III, Section 18 of the Constitution of Louisiana. If17
vetoed by the governor and subsequently approved by the legislature, this Act shall become18
effective on the day following such approval.19
The original instrument was prepared by Angela Lockett De Jean. The
following digest, which does not constitute a part of the legislative instrument,
was prepared by Riley Boudreaux.
DIGEST
N. Gautreaux (SB 458)
Present law provides that nonresident contractors and subcontractors who engage in,
prosecute, follow or carry on contracting business in this state must register with the
Department of Revenue (DOR) and provide for surety for the payment of state and local sales
tax due for each contract where the total contract price or compensation to be received
exceeds $3,000.00.
Proposed law provides that such nonresident contractors and subcontractors may be required
to register and provide surety for each contract where the total contract price or compensation
to be received is the same or exceeds the amount which would require the nonresident
contractor to register with the State Licensing Board for Contractors.
The State Licensing Board for Contractors requires licensing of contractors and SB NO. 458
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subcontractors when the entire cost of the construction undertaking, including labor,
materials, rentals, and all direct and indirect project expenses are:
1. $50,000 or more when the property is to be used for commercial purposes other than
a single residential duplex, a single residential triplex, or a single residential fourplex.
2. $75,000 or more for residential building contractors when constructing or
superintending the construction of any structure which is not more than three floors
in height, to be used by another as a residence.
3. $75,000 or more for home improvement contractors.
4. $10,000 or more for electrical contractors and mechanical contractors.
5. One dollar or more if the contractor is required to hold a license in the major
classification of hazardous materials, or any subclassifications thereunder.
Present law requires nonresident contractors and subcontractors to register with the
Department of Revenue (DOR) for each contract where the total contract price or
compensation to be received exceeds $3,000 and file a surety bond with the department for
all contracts, sufficient to cover all local sales taxes due on the contract. The contractor is also
required to register with the local sales tax collector. The secretary of DOR is authorized to
enjoin the performance of the contract and impose a penalty for commencing without a surety
bond of $200 or 2% of the construction contract, whichever is greater.
Proposed law requires nonresident contractors and subcontractors to register with the local
sales tax collector of the parish in which the contract is to be performed for each contract
where the total contract price or compensation to be received exceeds $3,000 if the contractor
or subcontractor is not registered with the DOR pursuant to proposed law. Authorizes the
local sales tax collector, at his option, to require the contractor to file a surety bond if the
contract amount equals or exceeds $50,000 and grants the collector the same authority as the
secretary in R.S. 47:9(B) with respect to the surety bond, including the authority to enjoin
performance and impose a penalty as set forth above. In addition, the contractor must submit
an accounting of all local sales taxes which are due as a result of the contract.
Present law provides that fees received by the DOR for such registration must be deposited
with the state treasurer to the credit of the State General Fund.
Proposed law removes this requirement from present law.
Effective August 15, 2010.
(Amends R.S. 47:9(A)(1), 306(D)(1) (intro para) and 306(D)(3), and 337.18(C))
Summary of Amendments Adopted by Senate
Committee Amendments Proposed by Senate Committee on Revenue and Fiscal
Affairs to the original bill.
1. Removes the discretion of the Department of Revenue to require nonresident
contractors and subcontractors to register with it and provide surety for
payment of taxes if the contract price exceeds $50,000, and instead requires
such contractors to register with the department and provide surety if the
contract price is the same or in excess of the amount which would require the
nonresident contractor to register with the State Licensing Board for
Contractors. SB NO. 458
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words in boldface type and underscored are additions.
2. Requires nonresident contractors and subcontractors to register with the local
sales tax collector of the parish in which the contract is to be performed for
each contract where the total contract price to be received exceeds $3,000.00
if the contractor or subcontractor is not registered with the DOR, and grants
such collector authority to require surety for contracts of $50,000 or above
and enforce the same.