La. Admin. Code tit. 61 § I-4418

Current through Register Vol. 50, No. 5, May 20, 2024

Section I-4418 - Nonprofit Organizations; Nature of Exemption; Limitations; Qualifications

A. General. Events sponsored by domestic, civic, educational, historical, charitable, fraternal, or religious organizations, which are nonprofit are exempt from the sales or use tax for these events, on the condition that the proceeds from these events, less applicable expenses, are used for the furtherance of the purpose for which the organization was formed.

1. This exemption applies to sales of tangible personal property, admission charges, outside gate admission charges, and parking fees.

2. The organization must apply for the exemption for each event and the application must be genuine. The application is Form R-1048.

3. If the exemption is approved, the secretary will provide a certificate of exemption for the specific event.

4. If the secretary denies the exemption, the organization may appeal to the Louisiana Board of Tax Appeals.

5. An event, as referred to in the statute, means an occurrence of relatively short duration with a scheduled beginning and ending date and/or time.

6. T he purchase of items to be sold at these events is not exempt from the advance state or local sales or use tax,where applicable . In order to receive a credit for the tax paid on items to be sold at one of these exempt events, the organization would register with the appropriate taxing authority as an irregular filer and then file a sales tax return taking a credit for the sales tax paid on the purchases for resale.

B. Exceptions. The statute is very specific as to the type of organizations and events that qualify for the exemptions. There are some exceptions that are referred to in the law.

1. If the event is intended to yield a profit to the promoter or to any individual contracted to provide services, or equipment, or both, for the event, the exemption shall not apply.

2. Nonprofit organizations are not exempt from sales or use taxes under this exemption, only from the collection of sales tax at certain events held by these organizations.

3. The statue does not offer an exemption from the sales and use taxes for regular commercial ventures such as, bookstores, restaurants, gift shops, commercial flea markets, and similar ventures that are operated by nonprofit organizations. The exemption applies to events that are not open on an ongoing basis.

4. Any organization which endorses any candidate for political office or is involved in political activities will not be eligible for the exemption.

5. The secretary may, at his discretion, recognize ongoing activities, e.g., concession sales at schools, and allow the organization to file an annual exemption application for such activities.

La. Admin. Code tit. 61, § I-4418

Promulgated by the Department of Revenue and Taxation, Sales Tax Division, LR 22:854 (September 1996), amended by the Department of Revenue, Policy Services Division, LR 31:94 (January 2005).

AUTHORITY NOTE: Promulgated in accordance with R.S. 47:305.14, R.S. 47:337.2, R.S. 47:337.9, and R.S. 47:1511.