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)]
HB 27 Original 2016 Second Extraordinary Session Broadwater
Abstract: Changes the state and local sales and use tax exclusion for the sale of materials for
further processing to a state and local sales and use tax exemption for the sale of raw
materials for further processing.
Present law provides for the definitions to be used in the administration of state and local sales and
use taxes.
Present law defines "sale at retail" to exclude the sale of materials for further processing into articles
of tangible personal property.
Proposed law repeals the state and local sales and use tax exclusion for the sale of materials for
further processing and enacts a state and local sales and use tax exemption for the same purpose.
Proposed law establishes the following criteria for the determination of qualification for the
exemption:
(1)The raw materials become a recognizable and identifiable component of the primary end
product.
(2)The raw materials are beneficial to the primary end product.
(3)The raw materials are materials for further processing, and as such, are purchased for the
primary purpose of inclusion into the primary end product.
Proposed law is intended to clarify the original intent of the special tax treatment of sales of
materials for further processing, and thus provides that proposed law shall be applicable for all
pending refund claims, applicable for any and all tax periods not barred by prescription, and
applicable to any and all claims arising or actions filed on or after the effective date of proposed law.
Effective upon signature of governor or lapse of time for gubernatorial action.
(Amends R.S. 47:301(10)(c)(i); Adds R.S. 47:305.4)