GREEN SHEET REDIGEST
HB 62 2016 First Extraordinary Session Jackson
(KEYWORD, SUMMARY, AND DIGEST as amended by Senate committee
amendments)
TAX/SALES-USE, STATE: Impose a one cent sales and use tax (Item #9).
HB 62 Reengrossed 2016 First Extraordinary Session Jackson
Abstract: Imposes a one percent state sales and use tax, beginning April 1, 2016, and
ending September 30, 2017, and provides with respect to the tax base.
Proposed law imposes a 1% state sales and use tax upon the sale at retail, the use, the
consumption, the distribution, and the storage for use or consumption in this state of each
item or article of tangible personal property as well as certain services. The tax shall be
levied beginning April 1, 2016, and will cease to be effective on April 1, 2021.
Present law establishes a dedication for economic development activities of an amount equal
to 0.004% of all state sales and use tax annual collections that remain after satisfaction of the
requirements of the present constitution for the Bond Security and Redemption Fund. Of that
amount, $2 million is deposited into the Marketing Fund, which is a special fund within the
state treasury for the support of various specific economic development organizations. All
monies in excess of the Marketing Fund allocation are deposited into the La. Economic
Development Fund, which is a special treasury fund to support a wide variety of economic
development activities.
Proposed law adds to present law by specifying that the tax established under proposed law
shall not be subject to the dedication of revenues for economic development.
Present law provides definitions for terms used for purposes of state and local sales and use
tax. Present law establishes the following exclusions from tax in the form of definitions:
(1)From the definition of "cost price":
Regarding the cost of certain publishing of free news publications, the cost is limited
to the lesser of the printing cost paid to unrelated third parties, less any itemized
freight charges for shipping and any itemized charges for paper and ink, or, payments
to a dealer or distributor as consideration.
Electricity and natural gas purchased or used by paper or wood products
manufacturing facilities.
Property consumed in the manufacturing process by paper and wood products
manufacturers.
(2)From the definition of "lease or rental":
Oilfield drilling equipment to be re-leased or re-rented.
Airplanes or airplane equipment used by a commuter airline domiciled in La.
Manufacturing machinery and equipment used for purposes related to production of
biodiesel.
Lease of a crane with an operator.
Pallets used by a manufacturer for packaging.
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Prepared by Leonore F. Heavey. (3)From the definition of "retail sale":
Pollution control equipment.
Equipment and devices associated with the wireless communication devices and
wireless telephone service.
Pelletized paper waste used as fuel for power generation.
Manufacturing machinery and equipment used for purposes related to production of
biodiesel.
Telephone directories used for advertising.
Natural gas to be held, used or consumed in providing natural gas storage ("cushion"
or "pad" gas).
Storm shutter devices.
Anthropogenic carbon dioxide used in a qualified tertiary recovery project (mineral
exploration and production).
Property sold at an event for La. culture, crafts, food, art, and music, with a five year
annual attendance in excess of 300,000 (New Orleans Jazz Festival).
(4)From the definition of "sales price":
The first $50,000 of the sale price of new farm equipment used in poultry production.
That portion of the value of refinery gas sold to another person by the person who
owns the gas generation facility, whether at retail or wholesale, that is in excess of
52 cents per thousand cubic feet multiplied by a fraction the numerator of which shall
be the posted price for a barrel of West Texas Intermediate Crude Oil on December
first of the preceding calendar year and the denominator of which shall be $29.
Payments made by a manufacturer directly to a dealer of the manufacturer's product
for the purpose of reducing the retail "sales price" of the product.
Speciality items sold to members of a non profit carnival organizations for fund-
raising purposes if the members are participating in a parade sponsored by the
organization.
Electric power and natural gas purchased or used by paper or wood products
manufacturing facilities.
(5)From the definition of "sales of services":
Equipment and devices associated with the wireless communication devices and
wireless telephone service.
Services performed at an event for La. culture, crafts, food, art, and music, with a five
year annual attendance in excess of 300,000 (New Orleans Jazz Festival).
(6)From the definition of "tangible personal property":
Numismatic coins, and platinum, gold, and silver bullion.
Custom computer software.
Equipment used for digital television conversion.
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Prepared by Leonore F. Heavey. Machinery and equipment used by a motor vehicle manufacturer, glass manufacturer,
or public utility in New Orleans.
Newspapers.
(7)From the definition of "use":
Rental of motor vehicles and other tangible personal property.
Free telephone directories used for advertising.
Manufacturing machinery and equipment used for purposes related to production of
biodiesel.
Property created or derived as a residue or byproduct of certain manufacturing
processes.
Equipment and devices associated with the wireless communication devices and
wireless telephone service.
Storm shutter device.
Anthropogenic carbon dioxide used in a qualified tertiary recovery project (mineral
exploration and production).
Proposed law limits the application of the exclusions to the existing 4% state sales and use
tax.
Present law establishes the following exemptions from state sales and use taxes:
(1)Racehorses purchased at a claiming race or other sale.
(2)Steam, water, electric power, and natural gas, boiler fuel utilized for nonresidential
purposes (business utilities).
(3)Water other than mineral, carbonated, and bottled water.
(4)Any materials or energy sources used to fuel the generation of electric power for
resale or used by an industrial manufacturing plant for self-consumption or
cogeneration.
(5) Boiler fuel.
(6)New motor vehicles, boats, vessels, or other water craft withdrawn from stock by
factory authorized dealers of new boats, vessels, or other water craft which are
withdrawn for use as demonstrators.
(7)Meals furnished by educational institutions, hospitals, nursing homes, adult
continuing care retirement communities, mental institutions, and boarders of rooming
houses.
(8)Sales of 50-ton vessels and new component parts and sales of certain materials and
services to vessels operating in interstate commerce.
(9)Regarding ships, barges, or vessels, including drilling ships, operating exclusively
in foreign or interstate coastwise commerce:
(a)Materials and supplies loaded upon any such ship, barge, or vessel for use or
consumption in the maintenance and operation thereof.
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Prepared by Leonore F. Heavey. (b)Repair services performed upon those vessels, and materials and supplies
used therein.
(c)Laundry services performed for the owners or operators of the vessels.
(10)Admissions to nonprofit entertainment.
(11)Amounts paid by a motion picture theater for film rental.
(12)Purchases by a nonprofit literacy organizations.
(13)Sale of materials, services, and supplies, used for repairing, renovating or converting
of any drilling rig, or machinery and equipment which are component parts thereof,
which is used exclusively for the exploration or development of minerals outside the
territorial limits of the state in Outer Continental Shelf waters.
(14)Vessels leased for offshore use.
(15)Sales, admissions, and parking fees associated with events sponsored by certain
nonprofit or religious organizations when the entire proceeds, except for necessary
expenses used for educational, charitable, religious, or historical restoration purposes,
including the furtherance of the purpose of the organization.
(16)Amounts paid by a radio and television broadcasters for the right to air content.
(17)Little theater.
(18)An event sponsored by a domestic nonprofit organization that is exempt from tax
under Section 501(c)(3) of the Internal Revenue Code when the event provides
Louisiana heritage, culture, crafts, art, food, and music, and the sponsor has
contracted for production management and financing services for the event.
(19)Installation and service of cable television equipment fees paid by a subscriber.
(20)Purchases of materials, supplies, fuel, and repairs for the vessel of a qualified
commercial fisherman.
(21)Purchases of materials, supplies, and repair services by certain seafood-processing
facilities.
(22)Vehicles loaned by a motor vehicle dealer free of charge to a secondary school,
college, or public school board for exclusive use in a driver education program.
(23)Gasohol.
(24)Ducks Unlimited, and other organizations promoting migratory water fowl.
(25)Catalogs.
(26)Purchase of trucks with a gross weight of 26,000 pounds or more and certain trailers
if used at least 80% of the time in interstate commerce and whose activities are
subject to the jurisdiction of the U.S. D.O.T.
(27)Purchase of certain contract carrier buses used 80% of the time in interstate
commerce.
(28)Railroad ties to be modified for installation at a location outside of the taxing
jurisdiction.
(29)Utilities, including electricity, used by steelworks and blast furnaces.
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Prepared by Leonore F. Heavey. (30)Purchases of certain items of tangible personal property, made on the first
consecutive Friday and Saturday of August each year.
(31)Sale of original, one-of-a-kind art from an established location within the boundaries
of a cultural product district.
(32)The first $1,500 of the purchase price of certain hurricane preparedness items or
supplies purchased on Saturday and Sunday during the last weekend in May of each
year.
(33)Purchases of construction supplies by Habitat for Humanity affiliates, Fuller Center
for Housing covenant partners, and the Make it Right Foundation.
(34)Purchase of certain water conservation equipment for use within the Sparta
Groundwater Conservation District.
(35)Purchases of firearms, ammunition, and hunting supplies for the first consecutive
Friday through Sunday of September.
(36)Purchase of certain construction materials by Hands on New Orleans and Rebuilding
Together New Orleans covenant partners used on residential dwellings destroyed or
damaged by Hurricanes Katrina or Rita.
(37)Offroad vehicles purchased by a resident of another state.
(38) Breastfeeding items.
(39)Purchase, use, or rental of materials, services, property, and supplies by the Fore!Kids
Foundation.
(40)Purchase of certain construction supplies by the Make it Right Foundation.
(41)Purchase of certain construction supplies by the St. Bernard Project, Inc.
Proposed law limits the applicability of the exemptions provided in present law to the
existing 4% state sales and use tax rate (R.S. 47:302, 321, and 331).
Present law authorizes a refund of state sales and use taxes paid with regard to certain
materials used in the rehabilitation of an existing structure or the construction of a new house
and associated improvements in an approved housing development area as provided in the
Louisiana Housing Area Development Law.
Proposed law limits the refund provided in present law to the existing 4% state sales and use
tax rate (R.S. 47:302, 321, and 331).
Present law authorizes a refund of state sales and use taxes paid on housing materials
destroyed in a natural disaster.
Proposed law limits the refund provided in present law to the 4% state sales and use tax rate
(R.S. 47:302, 321, and 331).
Proposed law repeals obsolete provisions concerning the Sparta Groundwater District,
vehicle modifications for persons with certain disabilities.
Effective upon signature of governor or lapse of time for gubernatorial action.
(Amends R.S. 47:301(1) through (28), 305(A)(2), (C), (D)(1), (2)(a)(intro. para.), (F), (G),
(H)(intro. para.) and (I), 305.1(A) and (B), 305.6, 305.7, 305.9, 305.13, 305.14(A)(1) and (5),
305.16, 305.19, 305.20(A) and (G)(1), 305.26, 305.28(A), 305.33, 305.41, 305.42,
305.43(B), 305.44(A), 305.49, 305.50(A)(1) and (2)(a), (B), and (F), 305.51(A),
305.54(B)(1), 305.56, 305.57(A), 305.58(A)(1), 305.59, 305.61(A), 305.62(B)(1), 305.65(A),
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Prepared by Leonore F. Heavey. 305.67, 305.68, 305.70, 305.71, 315.1(A), 315.2(A); adds R.S. 47:321.1; repeals R.S.
47:305.60, and 305.69)
Summary of Amendments Adopted by House
The House Floor Amendments to the original bill:
1. Add a sunset on the new tax.
2. Restore applicability of exclusions for manufacturing machinery and equipment
thereby excluding this equipment from the new tax levy.
Summary of Amendments Adopted by Senate
Committee Amendments Proposed by Senate Committee on Revenue and Fiscal Affairs
to the reengrossed bill
1. Extend the sunset date from October 1, 2017, to April 1, 2021.
2. Removes inconsistent language regarding local sales tax on news publications
that are distributed without cost.
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Prepared by Leonore F. Heavey.