§305.1. Exclusions and exemptions; ships and ships' supplies

A. The tax imposed by taxing authorities shall not apply to sales of materials, equipment, and machinery which enter into and become component parts of ships, vessels, or barges, including commercial fishing vessels, drilling ships, or drilling barges, of fifty tons load displacement and over, built in Louisiana nor to the gross proceeds from the sale of such ships, vessels, or barges when sold by the builder thereof.

B. The taxes imposed by taxing authorities shall not apply to materials and supplies purchased by the owners or operators of ships, barges, or vessels, including drilling ships, operating exclusively in foreign or interstate coastwise commerce, where such materials and supplies are loaded upon any such ship, barge, or vessel for use or consumption in the maintenance and operation thereof; nor to repair services performed upon such ships, barges, or vessels operating exclusively in foreign or interstate coastwise commerce; nor to the materials and supplies used in such repairs where such materials and supplies enter into and become a component part of such ships, barges, or vessels; nor to laundry services performed for the owners or operators of such ships, barges, or vessels operating exclusively in foreign or interstate coastwise commerce, where the laundered articles are to be used in the course of the operation of such ships, barges, or vessels.

C.(1) For purposes of this Section, the term "foreign or interstate coastwise commerce" shall mean and include trade, traffic, transportation, or movement of passengers or property by, in, or on a ship, barge, or vessel, including a drilling ship:

(a) Between a point in one state and a point outside the territorial boundaries of such state;

(b) Between points in the same state where the trade, traffic, transportation, or movement of passengers or property traverses through a point outside of the territorial boundaries of such state;

(c) At a point in or between points in the same state as part of or in connection with the business of providing or delivering materials, equipment, fuel, supplies, crew, repair services, laundry services, dredging waterways services, stevedoring services, other loading or unloading services, or ship, barge, or vessel movement services to or for ships, barges, or vessels, including drilling ships, that are operating in foreign or interstate coastwise commerce as defined in this Subsection; or

(d) At a point in or between points in the same state when such trade, traffic, transportation, or movement of passengers or property is part of or consists of one or more segments of trade, traffic, transportation, or movement of passengers or property that either (i) follows movement of passengers or property into or within the state from a point beyond the territorial boundaries of such state, (ii) precedes movement of the passengers or property from within the state to a point outside the territorial boundaries of such state, or (iii) is part of a stream of trade, traffic, transportation, or movement of passengers or property originating or terminating outside the territorial boundaries of such state or otherwise in foreign or interstate coastwise commerce, as defined in this Subsection.

(2) The term "foreign or interstate coastwise commerce" shall not include intrastate commerce, which, for purposes of this Section, shall mean any trade, traffic, transportation, or movement of passengers or property in any state that is not described in the term "foreign or interstate coastwise commerce" as defined in this Section.

(3) For purposes of this Section, the term "component part" or "component parts" shall mean and include any item or article of tangible personal property that is:

(a) Incorporated into, attached to, or placed upon a ship, vessel, barge, commercial fishing vessel, drilling ship, or drilling barge (collectively referred to in this Section as "vessel" or "vessels") during either (i) the construction of such vessel in the case of the exemption provided in Subsection A of this Section, or (ii) the repair of such vessel in the case of the exemption provided for in Subsection B of this Section;

(b) Required for the navigation or intended commercial operation of a vessel; or

(c) Required to obtain certification or approvals from the United States Coast Guard or any regulatory agency or classification society with respect to a vessel.

(4) For purposes of this Section and except with respect to any gaming equipment, as defined in R.S. 27:44(12), the determination of whether any item or article of tangible personal property is a component part shall be made without regard to any provision of the Louisiana Civil Code.

(5) The provisions of Paragraph (3) of this Subsection shall not apply to any gaming equipment as defined in R.S. 27:44(12).

D. The exemption from the state sales tax provided in this Section shall be applicable to any sales tax levied by a local governmental subdivision or school board.

Amended by Acts 1976, No. 554, §1, eff. Jan. 1, 1977; Acts 1982, No. 56, §1, eff. July 10, 1982; Acts 1985, No. 762, §1, eff. Sept. 1, 1985; H.C.R. No. 55, 1986 R.S; Acts 2002, No. 40, §1, eff. June 25, 2002; Acts 2002, No. 41, §1, eff. June 25, 2002; Acts 2003, No. 73, §1, eff. July 1, 2003; Acts 2006, 1st Ex. Sess., No. 34, §1, eff. Feb. 23, 2006.