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Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions.
Regular Session, 2011
SENATE BILL NO. 258
BY SENATOR WILLARD-LEWIS
TAX/TAXATION. Provides for the levy of state use tax on the purchase of property and
services which are used to be manufactured into items for use in "orbital environments" 500
miles above earth's surface if the sale does not occur in the state and dedicates all state tax
collected to make grants to such manufacturers. (10/1/11)
AN ACT1
To enact R.S. 47:305.66, relative to sales and use taxes; to provide with respect to the levy2
of state sales and use taxes upon transactions related to items manufactured within3
the state for use in orbital environments; to provide for a dedication of taxes4
collected on the sale or use of such property; and to provide for related matters.5
Be it enacted by the Legislature of Louisiana:6
Section 1. R.S. 47:305.66 is hereby enacted to read as follows:7
ยง305.66. Taxation and dedication of proceeds: items manufactured for use in8
orbital environments9
A.(1) Notwithstanding the provisions of R.S. 47:301(10)(c)(i)(aa) or any10
other law to the contrary, if for any reason the sale of an item manufactured11
for use in orbital environments is not subject to the sales tax of the state, then12
the sale or purchase of property, services, leases, or rentals which are used to13
be further processed or manufactured into such items shall be considered a14
taxable use of such items and shall be subject to the state use tax; provided that15
there shall be no duplication of the tax.16
(2) For purposes of this Section, "items manufactured for use in orbital17 SB NO. 258
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Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions.
environments" shall mean an item that is intended to be placed into service1
more than five hundred miles above the earth's surface.2
B.(1) Funds received by the Department of Revenue from state sales and3
use taxes collected upon transactions related to items for use in orbital4
environments as provided for in Subsection A of this Section shall be deposited5
upon receipt in the state treasury. After compliance with the requirements of6
Article VII, Section 9(B) of the Constitution of Louisiana relative to the Bond7
Security and Redemption Fund and prior to any money being placed into the8
general fund or any other fund, such funds shall be credited by the treasurer to9
a special fund hereby created in the state treasury to be known as the Orbital10
Manufacturing Development Fund.11
(2)The money in the fund shall be invested by the treasurer in the same12
manner as money in the state general fund and interest earned on the13
investment of the money shall be credited to the fund after compliance with the14
requirements of Article VII, Section 9(B) relative to the Bond Security and15
Redemption Fund. All unexpended and unencumbered money in the fund at the16
end of the year shall remain in the fund.17
(3)(a) The money in the Orbital Manufacturing Development Fund shall18
be administered by the Louisiana Economic Development Corporation19
pursuant to R.S. 51:2311 and the funds shall be deemed the property of the20
Louisiana Economic Development Corporation. The Louisiana Economic21
Development Corporation shall use money in the fund solely to make grants to22
manufacturers of items for use in orbital environments.23
(b) Manufacturers of items for use in orbital environments who receive24
money from the Louisiana Economic Development Corporation pursuant to a25
cooperative endeavor agreement are hereby precluded from challenging a tax26
assessment by the Department of Revenue based upon the location of delivery27
of an item for use in orbital environments.28
* * *29 SB NO. 258
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Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions.
Section 2. This Act shall become effective on October 1, 2011; if vetoed by the1
governor and subsequently approved by the legislature, this Act shall become effective on2
October 1, 2011, or on the day following such approval by the legislature, whichever is later.3
The original instrument was prepared by Jerry J. Guillot. The following
digest, which does not constitute a part of the legislative instrument, was
prepared by Riley Boudreaux.
DIGEST
Willard-Lewis (SB 258)
Proposed law subjects to state "use tax" the sale or purchase of property, services, leases, or
rentals which are used to be further processed or manufactured into items manufactured for
use in orbital environments if for any reason the sale of such an item is not subject to the
state "sales tax".
"Item manufactured for use in orbital environments" is defined as an item that is intended
to be placed into service more than 500 miles above the earth's surface.
The proceeds of the tax on such items is required to be credited by the Treasurer to the
Orbital Manufacturing Development Fund. The money in the fund must be administered by
the Louisiana Economic Development Corporation and the funds are deemed the property
of the corporation. The corporation must use money in the fund solely to make grants to
manufacturers of items for use in orbital environments.
Manufacturers who receive money from the corporation pursuant to a cooperative endeavor
agreement are precluded from challenging a tax assessment by the Department of Revenue
based upon the location of delivery of an item for use in orbital environments.
The money in the fund must be invested by the Treasurer in the same manner as money in
the state general fund and interest earned is credited to the fund. All unexpended and
unencumbered money in the fund at the end of the year remains in the fund.
Effective October 1, 2011.
(Adds R. S. 47:305.66)
Summary of Amendments Adopted by Senate
Committee Amendments Proposed by Senate Committee on Revenue and Fiscal
Affairs to the original bill.
1. Deletes the exemption from local sales tax for such items.
2. Completely changes the bill from a state and local sales tax exemption to the
special type of levy of state sales and use tax and the dedication of the tax
proceeds as set forth above.
3. Changes the effective date from July 1
st
to October 1, 2011.