The Legislature of Louisiana has voted to partially suspend the state sales tax exemption outlined in R.S. 47:331 for most business utilities purchases. Under House Concurrent Resolution No. 8, a 1 percent sales tax will be applied from July 1, 2015, to the end of the legislative session on Aug. 5, 2016.
The suspension of exemption applies to sales of steam, electric power or energy, natural gas, all energy sources used for boiler fuel (excluding refinery gas), utilities used by steelworks and blast furnaces, and water (excluding non-utility sources such as mineral, carbonated, bottled or jugged). This exception will be applicable at retail, consumption, distribution and storage.
There are exclusions to the new resolution, including the sale of natural gas for use in the direct reduced iron process; electrical power for chlor-alkali facilities; and electrical power or natural gas for paper or wood products in manufacturing facilities.
Louisiana municipal or county governments providing utility services will need to adjust sales taxes charged to business customers. For more information on complying with the sales tax exemption suspension, local governments should contact a member of the LaPorte Public Sector Industry Group.