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Regular Session, 2012
HOUSE BILL NO. 754
BY REPRESENTATIVES ROBIDEAUX, KLECKLEY, ADAMS, BARRAS, BURFORD,
GUILLORY, HAZEL, HOFFMANN, LAMBERT, LORUSSO, RITCHIE, AND
THIBAUT
TAX/TAX REBATES: Authorizes the secretary of DED to enter into state sales and use tax
rebate contracts with procurement processing companies which recruit purchasing
companies to La.
AN ACT1
To enact Chapter 3 of Subtitle VII of Title 47 of the Louisiana Revised Statutes of 1950, to2
be comprised of R.S. 47:6301, relative to rebates; to authorize contracts for certain3
state sales and use tax rebates; to provide for definitions, requirements, and4
limitations; to provide for the amount, approval, and issuance of rebates; to provide5
for the recapture of rebates under certain circumstances; to provide relative to the6
payment of certain taxes in error; to authorize the promulgation of rules and7
regulations; to provide for an effective date; and to provide for related matters.8
Be it enacted by the Legislature of Louisiana:9
Section 1. Chapter 3 of Subtitle VII of Title 47 of the Louisiana Revised Statutes of10
1950, comprised of R.S. 47:6301, is hereby enacted to read as follows: 11
ยง6301. Rebates; contracts for certain state sales and use tax rebates12
A. Definitions. For purposes of this Section, the following words shall have13
the following meanings unless the context clearly indicates otherwise:14
(1) "Affiliated entity" shall mean a person who, directly or indirectly through15
one or more intermediaries, controls or is controlled by or is under common control16
with another person.17
(2) "Department" shall mean the Department of Revenue.18 HLS 12RS-990 ENGROSSED
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(3) "New taxable sales" shall mean the sale of goods and services upon1
which state sales and use tax is paid under Title 47 of the Louisiana Revised Statutes2
of 1950 and which would not have occurred in the state but for the operation in the3
state of a procurement processing company.4
(4) "Procurement processing company" means a company engaged in5
managing the activities of unrelated purchasing companies.6
(5) "Purchasing company" means a company engaged in the activity of7
selling property and services to affiliated entities.8
(6) "Secretary" shall mean the secretary of the Department of Revenue.9
(7) "Significant positive economic benefit" means that net positive state tax10
revenues are to be generated as a result of the contract. This shall be determined by11
taking into account direct, indirect, and induced impacts based on a standard12
economic impact methodology utilized by the department, the value of the rebate,13
and any other state tax and financial incentives that are used by the department to14
secure the procurement processing company's business.15
B. Contract. The secretary of the Department of Economic Development is16
authorized to enter into a contract with a procurement processing company to recruit17
to Louisiana, purchasing companies that generate sales of items subject to the taxes18
imposed under this Title the business of which shall have a significant positive19
economic benefit to the state. The initial term of a contract shall not exceed twenty20
years and shall be renewable for up to an additional twenty years. The contract shall21
provide an incentive to the procurement processing company which shall be paid in22
the form of a rebate of a portion of the state sales and use taxes collected on new23
taxable sales by a purchasing company which is managed by a procurement24
processing company.25
C. Certification of sales. The secretary of the department shall determine the26
amount of incentive rebates to be paid to a procurement processing company27
pursuant to the contract. Rebate payments shall be based upon the amount of new28
taxable sales which are certified by the secretary.29 HLS 12RS-990 ENGROSSED
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D. Payment of rebate. Notwithstanding any provision of law to the contrary,1
the secretary of the department shall make the rebate authorized pursuant to the2
provisions of this Section from the state sales tax revenue generated by the new3
taxable sales occurring in this state as a result of the operation of a procurement4
processing company in Louisiana.5
(1) If after a rebate has been paid, the department determines that certain6
items included in the rebate payment did not constitute new taxable sales, the amount7
rebated for those items shall be recaptured by the department from the procurement8
processing company, subject to the prescriptive period set forth in R.S. 47:1561.2.9
(2) Notwithstanding any provision of law to the contrary, if a procurement10
processing company receives a rebate for new taxable sales under the provisions of11
this Section, in no event shall the taxes on such new taxable sales remitted to12
Louisiana by the purchasing company or affiliated entity constitute an overpayment13
as defined in R.S. 47:1621.14
E. The Department of Revenue may promulgate rules and regulations in15
accordance with the provisions of the Administrative Procedure Act as are necessary16
to implement the provisions of this Section.17
Section 2. This Act shall become effective on July 1, 2012; if vetoed by the governor18
and subsequently approved by the legislature, this Act shall become effective on July 1,19
2012, or on the day following such approval by the legislature, whichever is later.20
DIGEST
The digest printed below was prepared by House Legislative Services. It constitutes no part
of the legislative instrument. The keyword, one-liner, abstract, and digest do not constitute
part of the law or proof or indicia of legislative intent. [R.S. 1:13(B) and 24:177(E)]
Robideaux HB No. 754
Abstract: Authorizes the secretary of DED to enter into state sales and use tax rebate
contracts with procurement processing companies which recruit purchasing
companies to La.
Proposed law authorizes the secretary of the Dept. of Economic Development (DED) to
enter into a contract with a procurement processing company to recruit to La., purchasing
companies that generate sales of items subject to the taxes imposed under present law, the
business of which shall have a significant positive economic benefit to the state. The
contract shall provide an incentive to the procurement processing company which shall be HLS 12RS-990 ENGROSSED
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paid in the form of a rebate of a portion of the state sales and use taxes collected on new
taxable sales by a purchasing company which is managed by a procurement processing
company. The initial term of a contract shall not exceed 20 years with authority to grant
renewals for up to an additional 20 years.
Proposed law defines a "procurement processing company" as a company engaged in
managing the activities of unrelated purchasing companies. Further defines "new taxable
sales" as sales of goods and services upon which tax is paid under present law and which
would not have occurred in the state but for the operation of a procurement processing
company in La.
Proposed law defines an "affiliated entity" as a person who, directly or indirectly through
one or more intermediaries, controls or is controlled by or is under common control with
another person.
Proposed law provides that "significant positive economic benefit" means that net positive
state tax revenues are to be generated as a result of the contract. Further provides for how
DED shall determine "significant positive economic benefit".
Proposed law requires the secretary of the DED to determine the amount of incentive rebates
to be paid to a procurement processing company pursuant to the contract. Further requires
rebate payments to be based on the amount of new taxable sales which are certified by the
secretary of DED.
Proposed law requires Dept. of Revenue (DOR) to pay the rebate from the state sales tax
revenue generated by the new taxable sales occurring in La. as a result of the operation of
a procurement processing company in La.
Proposed law provides that if after a rebate has been paid, DOR determines that certain items
included in the rebate payment did not constitute new taxable sales, the amount rebated for
those items shall be recaptured by the department from the procurement processing
company, subject to the prescriptive period provided for in present law.
Proposed law provides that if a procurement processing company receives a rebate for new
taxable sales, in no event shall the taxes on such new taxable sales remitted to La. constitute
an overpayment.
Proposed law authorizes DOR to promulgate rules and regulations in accordance with the
APA as are necessary to implement the provisions of proposed law.
Effective July 1, 2012.
(Adds R.S. 47:6301)
Summary of Amendments Adopted by House
Committee Amendments Proposed by House Committee on Ways and Means to the
original bill.
1. Added definitions for an "affiliated entity" and "significant positive economic
benefit".
2. Deleted requirement that the governor determine the contract to be in the best
interest of the state.
3. Authorized renewal of the contract for up to an additional 20 years. HLS 12RS-990 ENGROSSED
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4. Changed payment of the rebate from the current collection of taxes imposed by
present law to state sales tax revenue generated by the new taxable sales
occurring as the result of the operation of a procurement processing company in
La.
5. Added provisions relative to the recapture of certain rebate payments, subject to
the prescriptive period provided for in present law.
6. Prohibited taxes paid on new taxable sales by the purchasing company or
affiliated entity from constituting an overpayment.