§305.36. Exclusions and exemptions; motor vehicles

A. Solely for purposes of the sales and use tax levied by the state, such tax imposed by R.S. 47:302(A), R.S. 47:321(A), and R.S. 47:331(A) shall not apply to the sale at retail, the purchase, lease, or the importation of motor vehicles, trailers, or semitrailers as defined by R.S. 47:451 that will be stored, used, or consumed in this state exclusively for lease or rental, provided that the gross proceeds derived from the lease or rental of the property not previously taxed shall be at reasonable market rates. If the secretary of the Department of Revenue finds that any person who has purchased, used, or imported motor vehicles, trailers, or semitrailers tax free under this Subsection has subsequently leased or rented motor vehicles, trailers, or semitrailers in transactions not at arms length at below market rates, the secretary shall presume that the person was not entitled to claim the exemption provided herein, and the burden shall be on that person to prove otherwise.

B. A person who has acquired or used property under this Section without payment of the tax imposed by R.S. 47:302(A), R.S. 47:321(A), and R.S. 47:331(A) shall be construed to be in the business of leasing, renting, or selling such property, whether or not the lessees have the right or obligation to purchase the tangible personal property or will otherwise acquire title to the property at termination of the lease. Therefore, a transaction entered into that is entitled lease, rental, lease-purchase, or similar name which for purposes other than state sales taxation might be considered a conditional sales contract or transaction in lieu of sale, shall be deemed for state sales tax purposes to be a taxable lease. The monthly or other periodic payments made under the agreement shall be subject to the tax imposed by R.S. 47:302(B), R.S. 47:321(B), and R.S. 47:331(B). These persons shall not be allowed to make an isolated or occasional non-retail sale of the property under R.S. 47:301(1) or R.S. 47:301(10).

C.(1) No person shall be entitled to purchase, use, or import motor vehicles, trailers, or semitrailers, under this Section without payment of the tax imposed by R.S. 47:302(A), R.S. 47:321(A), and R.S. 47:331(A) before having received an exemption number or certificate from the secretary of the Department of Revenue authorizing him to engage in the business of purchasing, using, or importing motor vehicles.

(2) The exemption provided by this Section shall be available only to dealers who have qualified with the Louisiana Motor Vehicle Commission and the Louisiana Used Motor Vehicle and Parts Commission.

D. The secretary of the Department of Revenue shall promulgate rules and regulations for carrying out the exemption provided by this Section. Any person not in compliance with those rules and regulations shall not be entitled to the exemption.

E.(1) A lessor who, before the effective date of this Section, entered into agreements for the lease or rental of new motor trucks and new motor tractors licensed and registered for twelve thousand pounds or more, or new trailers and semi-trailers licensed and registered for sixteen thousand pounds or more, and who, at the time the lease or rental agreements were entered into, notified the secretary that the sales tax on the lease or rental of the individual pieces of property would be reported as provided by R.S. 47:302(D) prior to its repeal in the 1982 Regular Session, may continue to retain the lease taxes collected on the leases and rentals of said property until the taxes paid at the time of registration of the individual items are recovered.

(2) The tax imposed by R.S. 47:302(B), R.S. 47:321(B), and R.S. 47:331(B) shall not be due as provided by R.S. 47:305.23 prior to its repeal in the 1982 Regular Session, on the lease or rental of automobiles and trucks for a period of six months or longer duration, but only if the Louisiana sales or use tax imposed on the sale price or cost price of the automobiles and trucks was paid at the time the vehicles were titled in and/or transferred into the state and the vehicles were placed in lease or rental service prior to the effective date of this Section.

Added by Acts 1982, No. 415, §1. Acts 1984, No. 539, §1, eff. Sept. 1, 1984; Acts 1985, No. 847, §1, eff. July 23, 1985; H.C.R. No. 55, 1986 R.S.; Acts 1991, No. 495, §1, eff. July 15, 1991; Acts 1997, No. 658, §2; Acts 2003, No. 73, §1, eff. July 1, 2003.