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 12 Original 2018 Third Extraordinary Session Jay Morris
Abstract: Removes the July 1, 2018, sunset provision with respect to the "suspension" of
applicability of various exclusions and exemptions from state sales and use tax, adds
applicability for all state sales and use tax for the exclusion for electricity used in stripper
well production, and dedicates the proceeds of a portion of the state sales and use tax
revenues to certain educational and healthcare providers, including support for the
public/private hospital partnerships.
Present law imposes a 2% state sales and use tax upon the sale, use, lease, or rental of tangible
personal property and certain services occurring in this state.
Present law, for the period from April 1, 2016, through July 1, 2018, restricts the applicability of
various exclusions and exemptions against that tax to the following:
(1)Food for home consumption, as defined in R.S. 47:305(D)(1)(n) through (r) on Jan. 1, 2003.
(La. Const. Art. 7 §2.2)
(2)Natural gas. (La. Const. Art. 7 §2.2)
(3)Electricity. (La. Const. Art. 7 §2.2)
(4)Water. (La. Const. Art. 7 §2.2)
(5)Prescription drugs. (La. Const. Art. 7 §2.2)
(6)Gasoline and other motor fuels subject to the state excise tax on fuel. (La. Const.
Art. 7 §29)
(7)Sales to the U.S. government and its agencies. (R.S. 47:301(10)(g))
(8)Sales of raw agricultural products. (R.S. 47:301(10)(e) and 305(A)(3))
(9)Lease or rentals of railroad rolling stock (R.S. 47:301(4)(k)), piggyback trailers (R.S.
47:305.45), and certain trucks and trailers in interstate commerce.
(R.S. 47:305.50(A) and (B))
(10)Tangible personal property for resale. (R.S. 47:301(10)(a)(i)) (11) Feed and feed additives for animals held for business purposes. (R.S. 47:305(A)(4))
(12)Farm products produced and used by farmers. (R.S. 47:305(B))
(13)Sales of fertilizers and containers to farmers. (R.S. 47:305(D)(1)(f))
(14)Sales of seeds for planting crops. (R.S. 47:305.3)
(15)Sales of pesticides for agricultural purposes. (R.S. 47:305.8)
(16)Purchases, use, and lease of manufacturing machinery and equipment.
(R.S. 47:301(3)(i)(i), (13)(k), and (28)(a))
(17)Sales of materials for further processing. (R.S. 47:301(10)(c)(i)(aa))
(18)Sale of 50-ton vessels and new component parts and sales of certain materials and services
to vessels operating in interstate commerce. (R.S. 47:305.1(A) and (B))
(19)La. Tax Free Shopping Program for international visitors. (R.S. 51:1301)
(20)Sales of farm equipment used in poultry production. (R.S. 47:301(13)(c))
(21)Sales of pharmaceuticals administered to livestock for agricultural purposes.
(R.S. 47:301(16)(f))
(22)Sales of livestock, poultry, and other farm products and sales at public livestock auctions.
(R.S. 47:305(A)(1) and (2))
(23)Materials used in the production of crawfish and catfish. (R.S. 47:305(A)(5) and (6))
(24)First $50,000 of farm equipment purchases. (R.S. 47:305.25)
(25)Fuel used on the farm. (R.S. 47:305.37)
(26)Taxation of electrical cooperatives. (R.S. 12:425)
(27)Overhaul of naval vessels. (R.S. 47:301(7)(c) and (14)(h))
(28)Purchases by state and local governments. (R.S. 47:301(8)(c))
(29)Transactions in interstate commerce and tangible personal property imported into this state,
or produced or manufactured in this state, for export. (R.S. 47:305(E))
(30)Parish councils on aging. (R.S. 47:305.66) (31)Articles traded in on purchases of tangible personal property. (R.S. 47:301(13)(a))
(32)A factory-built home. (R. S. 47:301(16)(g))
Proposed law changes present law by making permanent, those restrictions on exclusions and
exemptions applicable against the tax.
Present law, beginning July 1, 2016, provides for the applicability of specific exclusions and
exemptions against the tax as follows:
(1)Sales of room rentals by a camp or retreat facility owned by a nonprofit organization. (R.S.
47:301(6)(b))
(2)Sales of room rentals by a homeless shelter. (R.S. 47:301(6)(c))
(3)Sales, leases, and rentals of tangible personal property and sales of services necessary to
operate free hospitals. (R.S. 47:301(7)(e), (10)(p), and (18)(c))
(4)Sales, leases, or rentals of tangible personal property to Boys State of La., Inc. and Girls State
of La., Inc. (R.S. 47:301(7)(g) and (10)(r))
(5)Sales by nonprofit entities that sell donated goods. (R.S. 47:301(8)(f))
(6)Isolated or occasional sales of tangible personal property.
(R.S. 47:301(10)(c)(ii)(bb))
(7)Sales of human tissue transplants. (R.S. 47:301(10)(d))
(8)Sales of food items by a youth-serving organization chartered by the U. S. Congress. (R.S.
47:301(10)(h))
(9)Sales and donations of tangible personal property by food banks. (R.S. 47:301(10)(j) and
(18)(a)(i))
(10)Sales or purchases of fire-fighting equipment by volunteer fire departments.
(R.S. 47:301(10)(o))
(11)Sales to, and leases, rentals, and use of educational materials and equipment used for
classroom instruction by parochial and private elementary and secondary schools. (R.S.
47:301(7)(f), (10)(q)(ii), and (18)(e)(ii))
(12)Sales by parochial and private elementary and secondary schools that comply with the court
order from the Dodd Brumfield decision and federal law.
(R.S. 47:301(10)(q)(i) and (18)(e)(i)) (13)Sales, (R.S. 47:301(14)(b)(i)), but only of admissions to athletic and entertainment events
held for or by an elementary or secondary school and membership fees or dues of nonprofit,
civic associations.
(14)Sales or use of materials used directly in the collection of blood.
(R.S. 47:301(16)(j)).
(15)Sales or use of apheresis kits and leukoreduction filters. (R.S. 47:301(16)(k))
(16)Sales or use of orthotic devices, prosthetic devices, hearing aids, eyeglasses, contact lenses,
and wheelchairs prescribed by physicians, optometrists, or licensed chiropractors used
exclusively by the patient for personal use. (R.S. 47:305(D)(1)(k))
(17)Sales or use of ostomy, colostomy, and ileostomy devices and equipment.
(R.S. 47:305(D)(1)(l))
(18)Sales or use of adaptive driving equipment and motor vehicle modifications prescribed for
personal use. (R.S. 47:305(D)(1)(u))
(19)Sales of meals by educational institutions, medical facilities, mental institutions, and
occasional meals furnished by educational, religious, or medical organizations.
(R. S. 47:305(D)(2))
(20)Purchase or rental of kidney dialysis machines, parts, materials, and supplies for home use
under a physician's prescription. (R.S. 47:305(G))
(21)Sales of admissions to entertainment events by Little Theater organizations.
(R.S. 47:305.6)
(22)Sales of admissions to musical performances sponsored by nonprofit organizations. (R.S.
47:305.7)
(23)Sales of admissions to entertainment events sponsored by domestic nonprofit charitable,
religious, and educational organizations. (R.S. 47:305.13)
(24)Sales of admissions, parking fees, and sales of tangible personal property at events sponsored
by domestic, civic, educational, historical, charitable, fraternal, or religious nonprofit
organizations. (R.S. 47:305.14(A)(1))
(25)Sales of admissions and parking fees at fairs and festivals sponsored by nonprofit
organizations. (R.S. 47:305.18)
(26)Purchases of fishing vessels, supplies, fuels, lubricants, and repairs for the vessels of licensed
commercial fishermen. (R.S. 47:305.20) (27)Sales of butane, propane, or other liquified petroleum gases for private, residential
consumption. (R.S. 47:305.39)
(28)Sales and purchases by certain organizations that provide training for blind persons. (R.S.
47:305.15)
Proposed law changes present law by making permanent, those restrictions on exclusions and
exemptions applicable against the tax.
Present law, beginning July 1, 2017, provides for the applicability of specific exclusions and
exemptions against the tax as follows:
(1) Surface preparation, painting, and coating fixed or rotary wing aircraft and certified transport
category aircraft registered outside of this state. (R.S. 47:301(14)(g)(iv))
(2)Purchases and leases by qualifying radiation therapy treatment centers.
(R.S. 47:305.64)
(3)Sales and purchases of medical devices used by patients under the supervision of a physician.
(R.S. 47:305(D)(1)(s))
Proposed law changes present law by making permanent those restrictions on exclusions and
exemptions applicable against the tax.
Present law, beginning Oct. 1, 2017, provides for the applicability of specific exclusions and
exemptions against the tax as follows:
(1)Sales and purchases of platinum, gold, and silver bullion and numismatic coins.
(R.S. 47:301(16)(b)(ii))
(2) Sales and purchases of orthotic devices, prosthetic devices, restorative materials, and other
dental devices. (R.S. 47:305(D)(1)(t))
Proposed law changes present law by making permanent, those restrictions on exclusions and
exemptions applicable against the tax.
Proposed law changes present law effective July 1, 2018, by providing that the sale and purchase of
electricity used in production from a stripper well shall be exempt from all state sales and use taxes.
Present law, for the period from April 1, 2016, through June 30, 2018, provides that the exclusion
for the purchases, use, and lease of manufacturing machinery and equipment as provided in R.S.
47:301(3)(i)(i), (13)(k), and (28)(a) shall not apply to the 1% tax imposed under R.S. 47:321.
Proposed law changes present law by removing the June 30, 2018, sunset and providing instead that
the inapplicability and ineffectiveness of the exclusion for the purchases, use, and lease of manufacturing machinery and equipment shall be permanent for purposes of the 1% state sales and
use tax imposed under R.S. 47:321.
Present law establishes the Higher Education Initiatives Fund in the state treasury for purposes of
improving La.'s higher education institutions, including the improvement of university-based
teaching training programs and development of innovative teaching strategies, development of
additional distance learning university classrooms, and enhancement of library and scientific
equipment. Further requires monies in the fund to be available exclusively for higher education
institutions or for the Board of Regents.
Proposed law retains present law but requires $45M of the avails of the state sales and use tax levied
pursuant to R.S. 47:302 to be annually appropriated to the fund.
Present law establishes the TOPS Income Fund, as a special treasury fund for purposes of funding
the Taylor Opportunity Program for Students (TOPS). Requires monies donated or appropriated to
the fund to be invested in the same manner as monies in the general fund and for interest earned on
investments of monies in the fund to be credited to the fund.
Proposed law retains present law but requires $88M of the avails of the state sales and use tax levied
pursuant to R.S. 47:302 to be annually appropriated to the fund.
Present law establishes the Overcollections Fund in the state treasury. Monies in the fund shall be
invested in the same manner as monies in the state general fund and interest earned on investment
of monies in the fund shall be deposited in the state general fund.
Proposed law retains present law but requires the treasurer to deposit $25M of the avails of the state
sales and use tax levied pursuant to R.S. 47:302 into the fund for appropriation by the legislature to
fund the state portion of salaries of district attorneys, assistant district attorneys, and victims
assistance coordinators.
Present law establishes the La. Medical Assistance Trust Fund as a special treasury fund which shall
consist of monies generated by the provider fees on healthcare services collected and authorized for
deposit into the fund as provided by law and any other monies which may be provided by law.
Further requires the treasurer to establish a separate account within the fund for each healthcare
provider group in which provider fees are collected and deposited into the fund and any monies
deposited into the fund from other sources, and the interest earned on those monies, shall be
deposited into a separate account within the fund.
Proposed law retains present law but requires the treasurer to establish a separate account within the
fund and to deposit therein no less than $15M from the avails of the state sales and use tax levied
pursuant to R.S. 47:302, to be used solely for services provided by home and community based
healthcare providers for services for individuals with intellectual disabilities, and to fund the
rebasing of reimbursement rates for intermediate care facilities for individuals with intellectual
disabilities. Effective July 1, 2018.
(Amends R.S. 17:3129.6(B) and 5069(B), R.S. 46:2623(A), and R.S. 47:302(X)(intro. para.) and
(AA)(intro. para.), 321(O), and 331(P)(1); Adds R.S. 39:100.21(B) and R.S. 47:302(AA)(34))