La. Admin. Code tit. 61 § I-4417

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

Section I-4417 - Exclusions and Exemptions; Purchases Made with United States Department of Agriculture Food Stamp Coupons and Purchases Made under the Women, Infants, and Children's Program

A. This Section specifically exempts from the sales and use tax imposed by this Chapter, and any such tax imposed by any parish, board, or municipality, purchases of the following items:

1. eligible food items, as defined by the United States Department of Agriculture (USDA) regulations for the Food Stamp Program, when such food items are purchased with United States Department of Agriculture Food Stamp Coupons;

2. eligible food items authorized for purchase under the Women, Infants, and Children's (WIC) Program as administered by the Louisiana Department of Health and Human Resources, when such items are purchased with WIC Program Vouchers.

B. Definitions

Eligible Food Items for Purchases Made with Food Stamps-as defined in the regulations of the Food Stamp Program of the United States Department of Agriculture.

Eligible Food Items or Purchases Made with WIC Vouchers-the specific items authorized to be purchased with the WIC voucher used as the medium of exchange.

United States Department of Agriculture Food Stamp Coupons (Food Stamps)-coupons issued by the USDA Food Stamp Program.

WIC Program Vouchers (WIC Vouchers)-payment vouchers issued by the Women, Infants, and Children's (WIC) Program.

C. Limitations

1. The exemption for food items purchased with food stamps is limited to those items defined as eligible foods in the regulations of the USDA Food Stamp Program. As the definition of eligible foods changes, the food items eligible for this exemption will automatically qualify or become disqualified.

2. The exemption for eligible food items purchased with WIC vouchers is limited to those items specifically stated on the voucher which is used as the medium of exchange.

3. The exemptions for purchases utilizing food stamps and WIC vouchers are further limited to the amount of food stamps and WIC vouchers used in the transaction. Eligible food items purchased with mediums of exchange other than food stamps or WIC vouchers, such as cash, will be subject to applicable state and local sales and use taxes.

D. Purpose and Method

1. Federal regulations require that the exemption for food stamp purchases be administered so as to minimize the sales tax burden on any order of eligible foods. A special problem arises when a patron presents a combination of food stamps and cash in payment of eligible food consisting of food for preparation and consumption in the home (exempt from state sales taxes) and eligible food items such as ice, bottled water, loose candy, and seeds and plants for the production of food which except for this exemption would be taxable. Grocers are currently required to sort each order by separating the eligible food items from the entire order, either physically or through the use of electronic equipment. Since ice, bottled water, etc. are otherwise taxable items, the federal regulations would require a second sort to ensure that the food stamps are applied to those items first.

2. In order to comply with federal regulations that mandate food stamps be allocated first to taxable eligible food items, and to eliminate the need for double-sorting by dealers, purchases of eligible food items paid for with a combination of food stamps and cash will be given the following treatment for state sales tax purposes. Once the food stamps have been applied to the purchase, the remaining portion of eligible items which is to be paid for with cash will be treated as food for home consumption, notwithstanding any restrictions by R.S. 47:305(D). Thus, of the remaining portion of the eligible food items to be paid for with cash, items such as ice, bottled water, and loose candy will be taxed at the same rate as milk or bread. This method does not in any way affect ice, bottled water, loose candy, and other such items which are purchased by a patron who does not present food stamps in payment.

E. Purchases of items not considered eligible food items by the USDA regulations, such as detergent, will not be affected by this regulation and will remain subject to applicable state and local sales and use taxes.

La. Admin. Code tit. 61, § I-4417

Promulgated by the Department of Revenue and Taxation, Sales Tax Section, LR 13:667 (November 1987).

AUTHORITY NOTE: Promulgated in accordance with R.S. 47:305.46.