Current through Register Vol. 50, No. 9, September 20, 2024
A.R.S.
47:305.10 provides an exemption from state
and local sales or use tax for the purchase or importation of tangible personal
property in Louisiana for first use beyond the territorial taxing jurisdiction
of this state. This Section provides an exemption for purchases and
importations in two categories of first use: first use in another state; and
first use in the offshore area beyond the borders of Louisiana or any other
state.
B. Purchases or importations
of tangible personal property for first use in another state for which an
exemption is claimed under the provisions of
R.S.
47:305.10 may be accomplished by the use of
an exemption certificate LGST 9-D, entitled "Foreign Purchasers," which is
available from the Department of Revenue. The transaction must meet the
following requirements before the exemption will be allowed:
1. the purchaser is properly registered for
sales and use tax in the state of use and regularly reports and remits the
taxes due in such state; and
2. the
state in which first use occurs grants on a reciprocal basis a similar
exemption on purchases within that state for first use in Louisiana;
and
3. either
§4410. B.3.a or b must be
met in addition to requirements
§4410. B.1 and 2:
a. the purchaser obtains a written
authorization from the Secretary of the Department of Revenue to make the
tax-exempt purchase; or
b. the
property being purchased is a craft which would ordinarily be subject to
registration by the state of Louisiana as a motor boat, but is not in fact
registered for use in Louisiana.
C. Foreign nations and the territorial waters
of foreign nations are not considered to be another state for purposes of this
Section.
D. Tangible personal
property imported for use outside the state of Louisiana may still be imported
tax-free under
R.S.
47:305(E) if the
requirements specified in
§4401 are met. Under that provision,
specific pieces of property which have been clearly labeled for trans-shipment
outside the state of Louisiana at the time of their importation into the state
are exempt without the necessity for meeting the above guidelines.
E. Purchases or importations of tangible
personal property for use in the offshore area of Louisiana or that of any
other state, for which an exemption is claimed under
R.S.
47:305.10, may be accomplished by use of
either one of two exemption certificates available from the Department of
Revenue, LGST 9-D or LGST 9-O/S, depending on the following conditions:
1. if the exact location (area name, block
number, lease number) of first use of the property is known at the time of
purchase, the purchaser must claim exemption to the vendor by properly
completing an exemption certificate LGST 9-D;
2. if the exact location of first use of the
property is not known at the time of purchase, and the purchaser has been
assigned an "offshore registration number" by the Secretary of Revenue, then
the purchaser may claim the exemption by completing an exemption certificate
LGST 9-O/S and presenting it to the vendor. All accounting records of
importations and purchases made through the use of this certificate will be
maintained in such a manner so as to accurately account for tax-free and
tax-paid inventories until they are withdrawn for use. Physical segregation of
tax-free inventory is not required. In the case of fungible goods, such as
diesel fuel, where usage occurs continuously in travel in and out of the
offshore area, exemption certificate LGST 9 O/S may be used to make tax-free
purchases of such goods in their entirety. At the end of each reporting period,
the purchaser will determine that portion of the fungible goods which was
actually consumed within any taxing jurisdiction and make the necessary accrual
entries to record the proper tax due;
3. the LGST 9-O/S certificate may only be
used by purchasers who have been granted the "offshore registration number,"
and unauthorized use of the certificate is forbidden. An "offshore registration
number" will be evidenced by the word "offshore" appearing above the account
number on the purchaser's registration certificate, and the purchaser will be
required to enter this complete registration number on the LGST 9-O/S when
making tax-free purchases for first use offshore. Vendors should exercise
tenable judgment in accepting the LGST 9-O/S exemption certificate in lieu of
the sales tax. Vendors should also ensure that all required information appears
on the face of the certificate;
4.
an offshore registration number will be issued only to dealers who have
demonstrated to the Secretary of Revenue that the nature of their business is
such that consumption of tangible personal property occurs in the offshore area
beyond the territorial limits of Louisiana, or that of other states or foreign
nations. It must also be shown to the satisfaction of the secretary that the
records maintained by the purchaser are adequate to facilitate an examination
and that they document the location of first use of all tangible personal
property purchased tax-free under the provisions of this Section. In the case
of fungible goods, such as diesel fuel, which are purchased tax-free, the
purchaser must retain, and make available for examination, all purchase
invoices, vessel logs, fuel usage records, fuel transfer records, and all other
pertinent information which will determine the portion which has been consumed
in and/or delivered to, offshore locations, and the portion which has been
consumed in, and/or delivered to, locations within the taxing jurisdiction of
any state or foreign nation. Timely returns must be filed, along with the
proper remittance, to report the taxes due on all withdrawals from nontax-paid
inventory for taxable uses. The following shall be taxable uses:
a. withdrawal from nontax-paid inventory for
first use within the territorial limits of Louisiana or that of any other
state. The use tax cost basis shall be original acquisition cost;
b. withdrawal from nontax-paid inventory for
first use in a foreign nation or its territorial waters. The use tax cost basis
shall be the original acquisition cost;
c. withdrawal from nontax-paid inventory for
sale, exchange, trade, or barter under any circumstances. The sale will be
regarded as a casual sale under the provisions of
R.S.
47:301(10), and a use tax
will be due at the time of such withdrawal on one of the following bases:
i. in the case of property never previously
used, the use tax basis will be original acquisition cost;
ii. in the case of property which has
previously been used in the offshore area and subsequently returned to storage
in the offshore inventory, the use tax basis will be the lesser of original
acquisition cost or reasonable market value at the time of the
withdrawal;
d. the
subsequent return of property, following its first use in the offshore area, to
a location within the territorial limits of Louisiana for a taxable use at that
location. Such a use would subject the property to a use tax based on the
lesser of acquisition cost or reasonable market value at the time of its return
to the location of use within Louisiana. The return of property into the state
for the purpose of repairing, modifying, further fabrication, or for return to
the offshore inventory will not be regarded as taxable uses. Property returning
from offshore locations for repairs retains its exempt status for use tax
purposes, but the repair charges are taxable in accordance with
R.S.
47:301(14)(g);
e. the use of that portion of fungible goods
that is determined to have been consumed within the territorial limits of
Louisiana or that of any other state or any foreign nation.
F.R.S.
47:305.10 makes it clear that the
aforementioned records shall be maintained by the purchaser or importer, and
shall be made available for examination. It also provides that the offshore
registration number issued under the provisions of this Section may be revoked
by the secretary at any time, if the purchaser misuses the exemption to make
tax-exempt purchases of property for first use in the state, or if he fails to
maintain adequate records, or fails to report and remit any tax which becomes
due under this Section. In case of such a revocation, all tangible personal
property which is stored in an offshore inventory site will immediately become
taxable, unless the purchaser is able to identify the exact location (area
name, block number, lease number) of first use of the property. Thereafter, and
until the offshore registration status is reinstated, tax-free purchases may be
made only in instances when the exact location of first use is known at the
time of purchase, and a certificate form LGST 9-D is presented to the vendor.
The offshore registration number may be reinstated at the discretion of the
Secretary of Revenue, upon being provided with sufficient proof that the
conditions and requirements of this Section will be adhered to by the
purchaser. The burden for supplying proof of eligibility shall rest with the
purchaser/importer at all times, whether the request is for initial
registration or for reinstatement of a revoked registration.
G. This Section provides an exemption from
the sales and use tax on tangible personal property purchased in or imported
into a taxing jurisdiction under the circumstances described. All other
purchases and importations of property shall be subject to state and local
sales or use tax at the time of such purchase or importation, unless otherwise
exempted.
AUTHORITY NOTE:
Promulgated in accordance with
R.S.
47:305.10,
R.S.
47:337.2,
R.S.
47:337.9, and
R.S.
47:1511.
