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 560 Reengrossed 2019 Regular Session Abramson
Abstract: Authorizes the levy of an excise tax at the rate of 3% on the retail sale of industrial
hemp-derived CBD products.
Present law imposes state sales and use taxes on the sale, use, lease, or rental of tangible personal
property.
Proposed law retains present law and levies an excise tax on the sale of industrial hemp-derived
CBD products by a retailer to a consumer at the rate of 3% based on the retail sales price of these
products, in addition to other taxes, including state and local sales and use taxes. However, CBD
products that have been approved by the U.S. Food and Drug Administration (FDA) as prescription
medications or products that have been recommended for therapeutic use are excluded from the
excise tax levied in proposed law.
Proposed law defines "CBD" as cannabidiol.
Proposed law defines "industrial hemp" as any part of the plant Cannabis sativa, including the seeds
and all derivatives, with a delta-9-tetrahydrocannabinol concentration of not more than 0.3% on a
dry weight basis and cultivated and processed in accordance with federal law or rules. Industrial
hemp does not include plants that meet the definition of marijuana.
Proposed law defines an "industrial hemp-derived CBD product" as any industrial hemp-derived
product that contains CBD and is intended for consumption or topical use.
Proposed law requires retailers to use Dept. of Revenue (DOR) prescribed forms to report the excise
tax monthly and to pay the tax on or before the 20th day of the month following the month in which
the tax is applicable.
Proposed law authorizes DOR to collect, supervise, and enforce the collection of taxes, penalties,
and interest related to the excise tax. Further authorizes the DOR to promulgate rules and
regulations to implement the provisions of proposed law.
Proposed law dedicates the avails of the excise tax levied on industrial hemp to the Early Childhood
Education Fund.
Effective if and when House Bill No. 579 of this 2019 R.S. is enacted and becomes effective. (Applicable for all tax periods beginning on or after Jan. 1, 2020.)
(Adds R.S. 47:1692 through 1696)
Summary of Amendments Adopted by House
The Committee Amendments Proposed by House Committee on Ways and Means to the original
bill:
1. Change the name of and references to the tax from hemp and CBD tax to hemp-derived
CBD tax.
2. Decrease the excise tax rate from 15% of the retail sales price of hemp-derived CBD
products to 3% of the retail sales price of hemp-derived CBD products.
3. Define hemp-derived CBD products as any hemp-derived product that contains CBD
intended for consumption or topical use.
4. Remove the requirement for a consumer to be 21 years of age or older to purchase hemp-
derived products.
5. Remove requirement for tax stamps to be purchased and affixed to containers or
packages of CBD, CBD products, hemp, and hemp products.
6. Change the contingent effectiveness of proposed law from enactment of HB No. 138
from the 2019 R.S. to enactment of HB No. 579 of the 2019 R.S.
7. Change the dedication of funds derived from the excise tax from the New Opportunities
Waiver Fund to the Early Childhood Education Fund.
The House Floor Amendments to the engrossed bill:
1. Change references throughout proposed law from "hemp" to "industrial hemp".
2. Establish certain definitions for purposes of the industrial hemp-derived CBD tax in
proposed law.
3. Require "industrial hemp" to be cultivated and processed in accordance with federal law
or rules.
4. Require retailers to report the excise tax monthly and to pay the tax on or before the 20th
day of the month following the month to which the tax is applicable.
5. Exclude CBD products approved by the FDA as prescription medication or products recommended for therapeutic use and sales of industrial hemp for resale from the excise
tax.