House Concurrent Resolution No. 8 (“HCR 8”) suspends certain tax exemptions on “business utilities” for the tax periods beginning on or after July 1, 2015 through August 5, 2016. Pursuant to HCR 8, businesses will pay a one percent (1%) sales and use tax on their purchases of utilities. The types of business utilities, as interpreted by the Louisiana Department of Revenue in Revenue Information Bulletin No. 15-16 (June 29, 2015), include:
- Water (not including mineral water or carbonated water or any water put in bottles, jugs or containers, all of which are not exempted);
- Electric power or electric energy and any material or energy sources used to fuel the generation of electric power for resale or used by an industrial manufacturing plant for self-consumption or cogeneration;
- Natural gas;
- All energy sources when used for boiler fuel, except refinery gas; and
- Utilities used by steelworks and blast furnaces.
The Louisiana Chemical Association filed a lawsuit challenging the constitutionality of HCR 8. Consequently, some taxpayers intend to pay the tax on business utilities under protest pending the outcome of the LCA suit. Taxpayers intending to pay the tax under protest must do so at the time of payment and follow the procedures set forth in La. R.S. 47:1576. The taxes for July 2015 transactions are due Thursday, August 20, 2015.
Alternatively, the Department, in Statement of Acquiescence No. 15-001 (Aug. 13, 2015), agrees to permit taxpayers to utilize the overpayment refund procedure under La. R.S. 47:1621 following a final, non-appealable judgment in the LCA suit. Taxpayers considering the overpayment refund procedure, instead of the payment under protest procedure, that have questions about any potential risks associated with this option are invited to contact a member of the Jones Walker SALT team.