SALT Report 2206 – The Louisiana Department of Revenue issued a ruling regarding whether parts and materials purchased by equipment lease or rental dealers to repair and maintain their equipment are excluded from sales tax as provided in La. R.S. 47:301(10(a)(iii).
The Department stated that tangible personal property that is sold for future lease or rental does not qualify for the exclusion from sales tax as the statute governing the exclusion does not include parts or materials necessary for the repair or maintenance of lease or rental equipment. Further, the Department notes that this extends to items that are purchased and installed by the owner of the lease or rental equipment, or installed as a repair service that is separately billed by a third party.
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