SALT Report 1662 – The Louisiana Department of Revenue adopted an administrative rule regarding sales to contractors. The new rule, LAC 61:I.4372, presumes that sales of tangible personal property made to contractors for use in the construction, alteration, or repair of immovable property are sales to consumers or users, not sales for resale. As a result, the contractor is liable for sales and use tax on its purchases or importations of tangible personal property. The rule is effective August 20, 2012 and applies to transactions that occur on or after that date.
Additionally, Revenue Ruling No. 05-001 is superseded and repealed by LAC 61:I.4372 because it placed undue emphasis on the form or wording of the repair or alteration agreement.
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