Current through Register Vol. 50, No. 9, September 20, 2024
A.R.S.
47:305.50(A)(1) provides an
exemption from state and local sales and use taxes for trucks with a gross
weight of 26,000 pounds or more and for trailers, if such trucks and trailers
are used at least 80 percent of the time in interstate commerce and are subject
to the jurisdiction of the United States Department of Transportation.
R.S.
47:305.50 allows certain taxpayers to
register such trucks and trailers and contract carrier buses with the Office of
Motor Vehicles of the Department of Public Safety and Corrections (OMV) without
paying state or local sales or use tax.
R.S.
47:305.50 provides an exemption from state
and local sales and use taxes for the purchase, use or lease of qualifying
trucks and qualifying trailers, both of which have been purchased, used,
imported or leased. To qualify for the exemption, the taxpayer's activities
must be subject to the jurisdiction of the United States Department of
Transportation, and the taxpayer must certify to the OMV that the property will
be used at least 80 percent of its actual mileage in interstate commerce. The
Department of Revenue and the OMV provide forms on which to make these
certifications.
B. Any taxpayer who
claims the exemption in provided in
R.S.
47:305.50(A)(1) must
maintain records of the use of the property in order to document the actual
mileage. This exemption is for trucks with a gross weight of 26,000 pounds or
more and for trailers, if such trucks and trailers are used 80 percent of the
time in interstate commerce and are subject to the jurisdiction of the U.S.
Department of Transportation. The determination of whether a truck is used 80
percent of the time in interstate commerce must be based upon the actual
mileage of such truck. It is required that a truck cannot have more than 20
percent Louisiana intrastate miles.
1. If the
documentation indicates that the property was not used during the one-year
period following the date of its purchase for the required 80 percent or more
of its actual mileage in interstate commerce, the taxpayer will not qualify for
the exemption and state and local sales or use tax will be due on the amount
paid for the property at the rate that was applicable on the date the property
was purchased, plus interest from the date the property was purchased to the
date of the tax payment. The state sales or use tax must be reported on a sales
tax return provided by the Department of Revenue and paid to the Department of
Revenue by the twentieth day of the month following the end of the one-year
period in which the taxpayer fails to qualify for the exemption. The local
sales or use tax must be reported and paid to the proper local taxing authority
in accordance with their ordinances and the Uniform Local Sales Tax Code.
a. Calculation of interstate mileage does not
include commercial truck transportation that begins at a point of origin in a
state other than Louisiana to a destination in the same state. Guidance for the
sales and use tax exemption eligibility of trucks used in other states has been
set forth in Department of Revenue, Revenue Ruling 05-004. Revenue Ruling 04-05
offers guidance as well, because it sets forth the parameters in which
intrastate movement of goods would be considered interstate commerce.
b. Interstate mileage is based on the actual
mileage of the truck and must be proven through documentation such as with
driver's logs, motor carrier bills of lading, expense bills, and other
documentation reflecting the origin and destination points of items
transported.
2. If,
during any of the following one-year periods, the documentation indicates that
the property was not used for the required 80 percent or more of its actual
mileage in interstate commerce, the taxpayer will no longer qualify for the
exemption. If this occurs, state and local sales or use tax will be due on the
lesser of the purchase price or fair market value of the property on the first
day of the one-year period that it does not meet the 80 percent test. The tax
will be calculated based on the rate in effect on the first day of the one-year
period in which the taxpayer no longer qualifies for the exemption, plus
interest from the date the tax is due to the date of tax payment. The state
sales or use tax must be reported on a sales tax return provided by the
Department of Revenue and paid to the Department of Revenue by the twentieth
day of the month following the end of the one-year period in which the taxpayer
no longer qualifies for the exemption. The local sales or use tax must be
reported and paid to the proper local taxing authority in accordance with their
ordinances and the Uniform Local Sales Tax Code.
C. If the taxpayer fails to provide proper
documentation, it will be presumed that the taxpayer does not qualify for the
exemption and state and local sales or use tax will be due in accordance with
Subsection B above.
D.R.S.
47:305.50(A)(2) provides an
exemption from state and local sales and use taxes on the purchase, use or
lease of a qualifying truck. The exemption also applies to the purchase, use or
lease of a qualifying trailer, which has been purchased, imported or leased,
with or without a qualifying truck, for use with a qualifying truck. The
definition of qualifying truck and qualifying trailer are set forth as follows.
1. A Qualifying Truck meets the following
requirements:
a. registered as a Class I
vehicle, which is one carrying or transporting freight, merchandise or other
property, and shall have a registered gross weight of at least 80,000 pounds in
accordance with
R.S.
47:462. Gross weight is the weight of a
vehicle or vehicle combination without the load on all axles, including the
steering axle plus the weight of any load thereon as provided by
R.S.
47:451;
b. subject to the jurisdiction of the U.S.
Department of Transportation;
c.
will be or is registered with apportioned plates through the International
Registration Plan, or will be issued or is issued a special permit according to
provisions of
R.S.
32:387(J) from the
Department of Transportation and Development. In cases of issuance of a special
permit under
R.S.
32:387(J), the qualifying
truck shall engage in no less than 200 intermodal container moves per year,
regardless of whether or not the moves require a special permit. In the year of
acquisition, sale, disposal or destruction of the qualifying truck, the number
of intermodal container moves per year shall be prorated for the portion of the
year the truck was owned, operated, or owned and operated by the taxpayer.
R.S.
32:382(J) governs vehicles
hauling prepackaged products in international trade originating from or
destined to an intermodal facility, which such products are containerized in a
manner that they cannot be subdivided.
2. A Qualifying Trailer is one subject to the
jurisdiction of the U.S. Department of Transportation.
E. To obtain prior approval to audit or
investigate, an auditor shall submit a written justification, which may be
submitted via email, to the secretary. This approval is required to:
1. audit or investigate for the purpose of
determining the correct amount of the tax exemption;
2. an audit or investigation of a place of
business and the books, records, papers, vouchers, accounts and documents of
any taxpayer;
3. approval from the
secretary is not necessary for political subdivisions to audit, examine, or
investigate to determine the correct amount of tax exemption.
F. During a state of emergency
declared by the governor, if the declared emergency or related relief efforts
undermines the ability of a taxpayer, who is eligible for the exemption and the
provisions under
R.S.
47:305.50, to comply with this statute, then
secretary shall waive the requirements. However, a waiver of the requirements
should not affect the secretary's ability to begin or conduct an audit or
investigation.
G. The terms
"trucks" and "trailers" shall have the meaning ascribed to the terms truck,
trailer, road tractor, semi trailer, tandem truck, tractor and truck-tractor as
defined in
R.S.
47:451.
H. The weights referred to in
R.S.
47:305.50 are "gross vehicle weight ratings"
(GVWR), as determined by vehicle manufacturers. Manufacturers' determinations
of GVWR are usually indicated on plates or decals affixed to vehicles at the
time of their manufacture.
AUTHORITY NOTE:
Promulgated in accordance with
R.S.
47:305.50,
R.S.
47:337.2,
R.S.
47:337.9, and
R.S.
47:1511.
