Welcome! If you are reading this, you likely have an interest in state and local taxation (“SALT”). As part of our ongoing efforts to inform clients, colleagues, associates and friends in as timely a manner as possible about current events involving the SALT world, we, the Jones Walker SALT Team, have started a blog. In deciding on the format for the blog, and as New Orleanians, we, based upon our own experience and practice in the SALT arena, decided that we would not only discuss and explore the world of SALT, but would also include features and discussions related to the world of food and all that it involves.
While one might think that a blog that combines SALT with food is kitschy, and at some level it may be, food has provided us with inspiration while handling SALT cases. In fact, in a very specific case involving Louisiana state and local sales taxes, food provided the analogy that I believe explained the issue to the Louisiana Supreme Court better than any technical expert could have. In this recent video, I explain what the making of Bananas Foster and sales tax have in common. As mentioned in the video, Bananas Foster is one of my favorite iconic New Orleans desserts, and my favorite recipe can be found here.
I used the analogy of the making of Bananas Foster, and particularly the use of dark rum, in arguing a case before the Louisiana Supreme Court regarding the further processing exclusion.
As explained in the above video, and in a more in-depth discussion of my experience with Bananas Foster and sales tax, I used the analogy of the making of Bananas Foster, and particularly the use of dark rum, in arguing a case before the Louisiana Supreme Court regarding the further processing exclusion. In that case, one of the raw materials at issue served two purposes in the manufacturing process. In one instance, much of it was dissipated out of the process and did not become part of the end product. However, the remaining part of the raw material did remain in the end product and was identifiable, beneficial and added value to the end product. The tax collector argued that because much of the material dissipated that none of it was purchased for “further processing” and thereby, excluded from sales tax. In my argument to the Supreme Court, I described the process of making Bananas Foster and the use of the dark rum in that “manufacturing” process. Although, as I explained, the rum added a deep and rich molasses flavor, as part of the process of cooking the Bananas Foster, the alcohol was burned off and was not part of the finished product. Just like the raw material at issue in the case, part of the rum became a component of the end product and part of it did not. Hopefully, at least in part, by understanding that analogy, the Supreme Court understood the case. Ultimately, the Court ruled in my client’s favor and in doing so stated very clearly the standard for the further processing exclusion set forth in La. R.S. 47:301(10)(c)(ii).
As you can see from the video, the Jones Walker SALT Team believes that the relationship between food and the practice of state and local tax are closely intertwined for many reasons. We intend to post about important and relevant developments in state and local tax and also to share our thoughts and experiences about the culinary world. We hope that you will enjoy the blog and encourage you to participate and share your own experiences, not only in the SALT realm, but also with your own culinary experiences.