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R-1318 (9/96)

Information Concerning the Louisiana Advance Sales Tax

Revised Statute 47:306(B) of the Louisiana state sales tax law requires wholesale dealers selling tangible personal property

to other persons for resale to collect an “advance sales tax” on those wholesale sales. This “advance tax” serves as a pre-

remittance by the retail dealers of the tax that will become due on the ultimate retail sales of that property. The tax is collected

at the same rate as is imposed on the retail sales of the property. Retail dealers who pay the advance sales tax to their

wholesale suppliers are entitled to claim credit on their state sales tax return for the amount of advance tax for which they

were invoiced by their wholesale suppliers during the reporting period covered by the tax return. The Department issues a

refund to the retailer during any reporting period where the amount of advance sales tax paid by the retail dealer to his

wholesale suppliers exceeds the total of the sales tax that is due on the retailer‘s sales and the use tax that is due on any

taxable purchases, as computed on the monthly or quarterly sales and use tax return.

No Exemption from Collection

The sales tax law does not provide a general exemption to any dealer from the collection of the advance sales tax. Wholesale

dealers can be exempted from the collection of the advance sales tax only on specific transactions with certain customers

who have been issued special wholesaler sales tax account numbers by the Department. The advance sales tax or the tax

on retail sales must be collected on all other sales of taxable property to customers in Louisiana.

Exemption from Advance Tax Payment

R.S. 47:306(B) sets out the qualifying criteria that dealers must meet to be exempt from the payment of the advance sales

tax on their purchases of tangible personal property for resale. Dealers can qualify for an advance sales tax exemption based

on either the types of property they sell, or the types of customers to whom they sell, and/or transactions in which they engage.

Advance sales tax exemption wholesaler account numbers are granted to dealers if 50 percent of their sales can be classified

in either of Group A or Group B shown below:

A. Types of Property Sold

1. Vehicles that are subject to license and title on which the sales or use tax is to be paid separately on each vehicle to the

Office of Motor Vehicles of the Department of Public Safety and Corrections.

2. Lumber. This includes dressed timber, logs, timber sold by the board foot, and related unfinished building materials

fabricated from lumber, such as paneling and molding.

3. Farm Implements. This includes mechanical equipment intended for use primarily for a commercial farming operation

in the planting, cultivation, and harvesting of crops.

4. Motorized self-propelled earth-moving and construction equipment.

B. Types of Customers and Transactions

1. Sales to other dealers who will resell the property as movables. Even though the selling dealer must collect the advance

sales tax on some or all of these sales, such sales can be included in the base for the seller’s qualification for the advance

tax exemption if it can be determined that the buyers will resell the property that has been purchased from the applicant.

2. Sales originating from a Louisiana inventory where delivery is made outside of Louisiana by the seller’s own vehicles,

or through the use of an interstate common carrier with whom the seller has filed a bill of lading for the shipment indication

and out-of-state destination.

3. Sales of tangible personal property for first and exclusive use in the offshore area. Only those transactions on which

purchasers have furnished Sales Tax Exemption Forms R-1096 (LGST 9-D) or R-1023 (LGST 9-O/S) can be included

in the total for this category.

4. Sales to industrial users. An “industrial user” is defined for this purpose as a business engaged in the manufacture of

tangible personal property for sale, whose sales are primarily to other dealers for resale.

5. Sales to contractors. A “contractor” is defined for this purpose as a business that, by itself or through others, constructs,

alters, repairs, improves, or demolishes land or fixed structures.

Applications for advance sales tax exemption wholesaler numbers can be obtained from any office of the Department of

Revenue and Taxation. Applications must be completely filled out to provide the auditors who process the applications all

of the information necessary to determine whether the applicants possess the qualifications for the exemption as defined in

the statute. Each legal owner and business location of the legal owner must qualify individually for the exemption based on

the sales of the single location. In the case of a new business or a new business location, the Department will not consider

issuing an advance sales tax exemption wholesaler number until at least three sales tax returns have been filed. All advance

sales tax exemption wholesaler numbers expire three years from the month of issuance. Dealers must apply and requalify

for the advance sales tax wholesaler number six months prior to the expiration date.

Baton Rouge - Main Office

Lake Charles

Shreveport

Houston

330 North Ardenwood

Suite 1550

1525 Fairfield Avenue

Suite 325

P.O. Box 201

One Lakeshore Drive

P.O. Box 31706

5177 Richmond Avenue

Baton Rouge, LA 70821-0201

P.O. Box B

Shreveport, LA 71130-1706

Houston, TX 77056-6736

Lake Charles, LA 70602-3702

Alexandria

Monroe

Thibodaux

900 Murray Street

Room 105

1418 Tiger Drive

P.O. Box 1191

122 St. John Street

P.O. Box 1429

Alexandria, LA 71301-1191

P.O. Box 1783

Thibodaux, LA 70302-1429

Monroe, LA 71210-1783

Lafayette

New Orleans

Dallas

Brandywine III, Suite 150

Suite 900

Suite 315-LB#15

825 Kaliste Saloom Road

1550 Poydras Street

4100 Spring Valley Road

P.O. Box 81857

New Orleans, LA 70112-3701

Dallas, TX 75244-3618

Lafayette, LA 70598-1857

Form R-1318 - Application For Advance Sales Tax Exemption "W" Number - Louisiana Department Of Revenue And Taxation

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