La. Admin. Code tit. 61 § I-4307

Current through Register Vol. 50, No. 9, September 20, 2024

Section I-4307 - Collection

A. Collection from Dealers

1. All of the taxes imposed under R.S. 47:302, R.S. 47:321, R.S. 47:331, and local sales or use tax ordinances are governed by these provisions. Every person engaged as a dealer, which R.S. 47:301 defines to be either party to a transaction creating a tax liability under state and local sales and use tax law, is made liable for collection of the tax. Dealer includes both the seller and the purchaser of tangible personal property, the person who uses, consumes, distributes, or stores tangible personal property in a taxing jurisdiction to be used or consumed there if an applicable state or local sales or use tax has not previously been paid thereon, the lessor or lessee, the rentor or rentee of tangible personal property rented or leased within the taxing jurisdiction, and the person who performs or furnishes any of the services covered by R.S. 47:301(14) or the person for whose benefit the services are furnished.

2. The importation of tangible personal property from outside of a taxing jurisdiction, to be used, consumed, distributed, or stored to be used or consumed in the taxing jurisdiction is treated the same as if the articles had been sold at retail for any of those purposes within the taxing jurisdiction, and such articles are thereby taxable to the person who causes them to be imported. The taxes levy immediately, and can be collected immediately. There shall be no tax on the importer, however, if all applicable taxes imposed under state and local sales or use tax law have been previously paid. Sections R.S. 47:303 and 47:337.15 clearly provide that there shall be no duplication of these taxes.

3. Solely for state sales and use tax purposes, if a tax similar to that imposed by R.S. 47:302, 321, and 331 is imposed by the state from which property is imported and if the state from which imported allows a credit to persons who import tangible personal property into that state for any sales or use tax which might have previously been paid to the state of Louisiana, a credit will be allowed against Louisiana's state sales and use tax for the tax paid to the other state. In order for the credit to be operative, both of the qualifying conditions must be met. The importer must have paid a similar tax upon either the sale or use of the same identical property in another state and the other state must allow a credit similar to this credit. The only exception to the double qualification standard is in the case of military personnel who are enlisted for two years or more who purchase automobiles outside the state of Louisiana while on their tour of active duty. In this instance, the credit will be allowed for the taxes paid the other state, whether or not that state allows a similar credit for Louisiana taxes paid.

4. Solely for state sales and use tax purposes, the use tax is based on either the cost of the tangible personal property being imported or its fair market value at the point at which it comes to rest in the state of Louisiana, whichever is the lesser of the two. Most frequently, the value upon which the Louisiana use tax is based will be less than original cost on which the taxpayer paid tax in the state of purchase. In those instances, credit will be allowed against the Louisiana use tax only in an amount equal to the tax rate paid to the other state, as distinguished from local government in the other state, applied to the value being taxed under the Louisiana law. No credit will be allowed against the Louisiana use tax for taxes paid to political subdivisions in another state or to foreign countries. In no event will a credit greater than the tax imposed by Louisiana on any particular piece of tangible personal property be allowed.

5. Solely for state sales and use tax purposes, in any case in which a taxpayer claims credit for a tax paid to another state, he must be in a position to prove payment of the tax before the credit will be allowed. The precise proof required will vary with the nature of the property and the circumstances surrounding its importation into the state.

6. For local sales or use tax purposes, the credit for taxes paid is governed by R.S. 47:337.86.

B. Collection of Tax on Vehicles

1. In view of the regulatory function performed by the vehicle commissioner in issuing license plates for the registration of vehicles and in issuing certificates of title to vehicles, R.S. 47:303(B) provides that all sales taxes levied state and local taxing authorities on the sale or use of vehicles shall be paid to the vehicle commissioner as the agent of the secretary or local collector, if so contractually provided, before a certificate of title or vehicle registration can be issued. The vehicle commissioner serves as agent for the collector only with respect to those vehicles required to be registered and/or titled with the vehicle commissioner. Generally, this covers all vehicles which have been found to be safe for highway use and can pass safety inspection. While R.S. 47:303(B) makes the vehicle commissioner the agent of the collector for purposes of collecting the taxes, the collector is the only proper party to defend or institute any legal action involving the taxes imposed with respect to any motor vehicle, automobile, motorcycle, truck, truck-tractor, trailer, semi trailer, motor bus, house trailer, or any other vehicle subject to the vehicle registration or title requirements. Conversely, the collector has no authority or jurisdiction whatever in the issuance of vehicle registration licenses or vehicle titles. This is the absolute domain of the vehicle commissioner.

2. The sales taxes levied by R.S. 47:302(A)(1), 47:321(A)(1), 47:331(A)(1), and the ordinances of political subdivisions is due at the time of registration or transfer of registration as required by the vehicle registration license tax law. The use taxes levied by R.S. 47:302(A)(2), 47:321(A)(2), 47:331(A)(2), and the ordinances of political subdivisions on the use of a vehicle in this state is due at the time first registration in this state is required by the vehicle registration license tax law. That law basically requires that a vehicle purchased in Louisiana be registered immediately upon purchase. Consequently, the sales taxes are due at the time of the purchase transaction. The vehicle registration license tax law basically provides that the vehicle shall be registered in this state immediately upon its importation for use in Louisiana. The use taxes, therefore, become due when the vehicle has entered the state for use.

3. For purposes of the sales taxes, every vendor is required to furnish to a purchaser at the time of a sale, a sworn statement fully describing the vehicle including the serial number, the motor number, the type, year, and model of the vehicle, the total sales price, the amount of any allowance, and a full description of any vehicle taken in trade, the net difference being paid by the purchaser between the vehicle purchased and the one traded in, and the amount of sales or use tax to be paid. Every component of the vehicle attached thereto at the time of the sale and which is included in the sales price, including any labor, parts, accessories, or other equipment, are considered to be a part of the vehicle and not a separate item of tangible personal property. The vehicle commissioner has the right to examine the statement furnished to the purchaser at the time of the sale and in any case in which he determines that the total sales price or the allowance for the vehicle traded in do not reflect reasonable values, he may adjust either to reflect the fair market value of the vehicle involved. Generally, this will be done by reference to current values published by the National Automobile Dealers Association. This revaluation is solely for the purpose of determining the proper amount of sales or use tax due and in no way influences the prices agreed upon between the buyer and the seller. The vehicle commissioner also has the authority to require affidavits from either the vendor or the purchaser, or both, to support a contention that some unusual condition adversely affected the cited sales price. In any event, the minimum tax due shall be computed on the consideration cited as the difference paid by the purchaser between the vehicle purchased and the vehicle traded in.

4. In order for a transaction involving motor vehicles to qualify for trade-in treatment for sales/use tax purposes, the following additional conditions must be met.

a. Ownership of the trade-in vehicle must be transferred to the seller of the new vehicle simultaneously with or prior to the taking of delivery by the purchaser of the new vehicle from the seller.

b. In those cases where special equipment must be installed on the new vehicle or where delivery of the trade-in vehicle cannot be made, an additional period of time will be allowed for the installation of the special equipment or delivery of the trade-in vehicle provided the new vehicle and the trade-in vehicle cannot be in the purchaser's service at the same time.

c. The actual trade-in value of the trade-in vehicle must be established by the purchaser and the seller at or prior to the time of the transfer of ownership of same to the seller, provided such value must be established within 10 days after delivery.

d. The certificate of title to the trade-in vehicle must be in the name of the purchaser of the new vehicle.

e. In the event the new vehicle is not delivered to the purchaser at the time the trade-in vehicle is delivered to the seller, there must be an obligation on the part of the purchaser to take delivery from the seller of the new vehicle.

f. The records of both the seller and the purchaser must reflect a complete description of the transaction.

g. At the time of transfer of ownership of the new vehicle, the invoice from the seller must reflect not only the sales price of the new vehicle but also a complete description of the trade-in vehicle, including the amount of the actual trade-in value.

h. The sales or use tax due to state and local taxing authorities shall be computed on gross sales price of the new vehicle in the case of a sale, or on the cost price of the new vehicle in the case of a transaction subject to the use tax, less the previously established actual trade-in value of the trade-in vehicle.

i. In order to constitute a trade-in to be used as a method of reducing the sales or use tax, there must be a transfer of ownership and the value of the trade-in vehicle must represent a part of the purchase price of the new vehicle. A payment in cash, check or in any other form in lieu of a reduction in or a part of the purchase price of a new vehicle does not constitute a trade-in. The accounting principles used in arriving at the value of any given vehicle for sales or use tax purposes and for trade-in purposes must be consistent.

ii. In any case in which a governing body of any parish or municipality, or the school board of any parish or municipality, has imposed a sales or use tax on the sale or use of motor vehicles, the vehicle commissioner is authorized to enter into an agreement with the governing body by which the vehicle commissioner will collect the tax on behalf of the said parish, municipality, or school board. The vehicle commissioner is authorized to withhold 1 percent of all such taxes collected for parishes, municipalities, or school boards to be used by the commissioner to pay the cost of collecting and remitting the balance of the tax to the respective parishes, municipalities, and school boards. Such local taxes shall be paid to the vehicle commissioner in the same manner as the state sales or use taxes and no title or vehicle registration shall be issued until the taxes have been paid.

5.R.S. 47:303(B)(6) allows automobile lessors or renters that are subject to the Automobile Rental Tax imposed by R.S. 47:551 to transfer to their customers any local sales or use tax paid on automobiles purchased for their rental fleet. However, since July 1, 1996, R.S. 47:301(10)(a)(iii) has excluded automobiles purchased for subsequent lease or rental from local sales or use tax. Therefore, the transfer of local sales and use tax allowed by R.S. 47:303(B)(6) is obsolete and automobile lease or rental dealers are no longer allowed to collect this surcharge.

6. The sales tax exemption for isolated or occasional sales of tangible personal property provided by R.S. 47:301(10)(c)(ii) does not apply to sales of motor vehicles. R.S. 47:303(B)(4) provides that isolated or occasional sales of vehicles are specifically defined to be sales at retail and subject to state and local sales or use tax.

7. The vehicle commissioner may require any dealer engaged in the business of selling motor vehicles, automobiles, motorcycles, trucks, truck-tractors, trailers, semi-trailers, motor buses, house trailers, or any other vehicle subject to the vehicle registration license tax law or the title registration law to furnish information relative to their sales on any periodic basis designated by the vehicle commissioner. The statements shall include the serial number, motor number, type, year, model of the vehicle sold, the total sales price, any allowance for trade-in, a description of the trade-in, the total cash difference to be paid by the purchaser, and any sales or use taxes to be paid. The vehicle commissioner is also authorized to secure whatever other additional information is necessary for proper administration of the tax.

8.R.S. 47:303(A)(3) allows a credit against the state use tax for taxes paid to another state provided the other state allows a similar credit for taxes paid to Louisiana. For credits allowed against taxes imposed by local taxing authorities, see R.S. 47:337.86.

9.

a. Generally, a certificate of title or vehicle registration will not be issued to any purchaser for any vehicle on which state or local sales or use tax has not been paid. However, R.S. 47:303(B)(5) provides an exception for purchasers who paid the proper taxes due to the vehicle dealer at the time the vehicle was purchased, but the dealer did not remit the taxes to the vehicle commissioner. Under this provision, a motor vehicle purchaser who has not been issued a certificate of title or vehicle registration license within six months after the date of the sale, may submit a written request to the secretary showing that:

i. all state and local sales taxes and fees due by the purchaser were paid in good faith to the motor vehicle dealer at the time of purchase;

ii. the motor vehicle dealer has not yet remitted the taxes and fees to the vehicle commissioner;

iii. the motor vehicle dealer has refused or is unable to respond to a written demand by the purchaser for payment of the taxes and fees to the vehicle commissioner; and

iv. the certificate of title or vehicle registration license has not been issued within the six months after the date of the sale.

b. If the purchaser's request appears reasonable and the facts represented are found to be accurate, the secretary may authorize the vehicle commissioner to issue a certificate of title or a vehicle registration license. If the secretary denies the purchaser's request, the denial will be in writing and the purchaser may file an appeal with the Board of Tax Appeals within 60 days after the date of denial by the secretary.

C. Collection of Tax from Auctioneers

1. Generally, the sales tax law contemplates a situation in which the owner of property, or a person having title to property, sells tangible personal property to another person, thereby creating a taxable transaction. In this instance, the sales tax law places a liability upon the seller to collect the state and local sales or use tax from the purchaser and remit the tax to the appropriate collector . Because of this basic concept, special provisions have been included in R.S. 47:303(C) and 47:337.15(C) to cover sales which do not fall within that general method of doing business. In the case of auctioneers, the actual owner of the property turns it over to the auctioneer who conducts the sale and consummates the final transfer of title, as a third party, from the owner to the purchaser. He may well represent a number of property owners at one auction sale.

2. In view of the unique position occupied by auctioneers with relationship to the owner of the property being sold, R.S. 47:303(C) and 47:337.15(C) require that all auctioneers shall register as dealers and must display their registration certificates to the public as a condition of doing business in a taxing jurisdiction . The auctioneer is then held responsible for collecting all state and local sales or use tax on articles sold by him and is responsible for properly reporting and remitting the amount collected.

D. Collection of Tax on Motorboats and Vessels

1.R.S. 47:303(D) and 47:337.15(D) provide that the secretary of the Department of Wildlife and Fisheries shall not issue a certificate of registration on any boat or vessel which is purchased in, or imported into, Louisiana until satisfactory proof is presented showing that all state and local sales taxes have been paid. This will be in the form of a "tax payment certification for boat registration", which is available through the boat dealer or at any office of the Department of Revenue.

2. In the case of a boat or vessel purchased from a Louisiana dealer, the certificate will be completed and signed by both the purchaser and the dealer, and will include the dealer's sales tax registration number.

3. In the case of a boat or vessel brought in from another state, the certificate must be completed and signed by the purchaser and a revenue deputy of the Department of Revenue and also by a tax collecting agent of the local collector where the purchaser resides. The proper use taxes will be due to the appropriate state and local taxing authorities, subject to credit for sales taxes paid in another state, as provided by R.S. 47:303(A) and 47:337.86.

4. In the case of a boat or vessel purchased from an individual owner who is not engaged in the business of selling boats or vessels, the certificate must be completed and signed by the purchaser and a revenue deputy of the Department of Revenue and by a tax collecting agent of the local collector where the purchaser resides. Sales of boats and vessels by individual owners will be regarded as isolated or occasional sales, and not subject to state and local sales or use tax . The purchaser, however, must provide sufficient documentation to support such a basis for exemption, such as a canceled check and a notarized bill of sale, or the prior owner's certificate of registration showing his or her transfer of ownership to the purchaser.

5. The completed "tax payment certification" form will then be presented to an office of the Department of Wildlife and Fisheries to obtain a registration certificate.

E. Collection of Tax on Off-Road Vehicles

1.R.S. 47:303(E) and 47:337.15(E) point out clearly that off-road vehicles are subject to state and local sales or use tax and require that a certificate of title be obtained from the vehicle commissioner in the same manner as with other motor vehicles. The exclusion of motor vehicles from the isolated or occasional provision which appears in R.S. 47:303(B)(4) applies equally to off-road vehicles as it does to cars and trucks. Thus, a purchaser of an off-road vehicle from a person who is not registered with state and local taxing authorities to collect and remit sales taxes shall pay the proper sales taxes at the time the vehicle is titled.

2. Beginning September 1, 1986, all off-road vehicles which are of 1987 model or later manufacture must bear evidence of tax payment by displaying a decal issued by the vehicle commissioner. The decal will be required whether the off-road vehicle is sold as new or used, and must be renewed every two years. The fee for such decals shall be the same as that charged for license fees of other motor vehicles, whether the decal is for new issue, renewal, transfer of ownership, or replacement of a lost or illegible decal.

F. Collection of Tax on Memberships in Health and Physical Fitness Clubs. R.S. 47:303(F) and 47:337.15(F) concern the collection and remittance of sales taxes for memberships in health and physical fitness clubs due under R.S. 47:301(14)(b). Generally, the taxes imposed under state and local sales and use tax laws are to be reported and remitted for the period in which the sale of tangible personal property or the sale of taxable services occurred, regardless of whether or not the vendor has collected the proceeds or taxes from the customer. R.S. 47:303(F) and 47:337.15(F), however, provide that operators of health and physical fitness clubs may report and remit the taxes due on memberships for the period in which the proceeds are actually collected, for those sales of memberships which are payable over an extended period of time, on a monthly basis. Such extended payment plans typically include actual or imputed interest charges in each monthly payment. Only the membership dues are subject to the tax, so that the club operator may report as sales of services, and remit taxes on, only that portion of the proceeds which represents membership dues, according to the terms of the contract. Also, if the club operator uses a collection agency to collect the amounts due, the collection fees withheld from the proceeds are subtracted from the reported sales of services. When membership contractual payment plans are resold to a financial institution, only the net proceeds received by the club operator will be the amount reported as sales of services for that reporting period. The discount withheld by the financial institution will be regarded as interest, and will not be included in the taxable base.

La. Admin. Code tit. 61, § I-4307

Promulgated by Department of Revenue and Taxation, LR 13:107 (February 1987), amended by the Department of Revenue and Taxation, Sales Tax Division, LR 20:316 (March 1994), amended by the Department of Revenue, Policy Services Division, LR 29:2116 (October 2003), LR 30:2861 (December 2004).

AUTHORITY NOTE: Promulgated in accordance with R.S. 47:303, R.S. 47:337.2, R.S. 47:337.15, and R.S. 47:1511.