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Electric Power Plant...
The electric power generating plant was not public service property subject to a state assessment of 25% of fair market value. It is property subject to local assessment at 15% of fair market value
Although the list of businesses in RS 47:1851(M) to which the public service property category applied included electric power companies, RS 47:1851(E) limited the definition of an electric power company to companies generating or supplying electricity to consumers in the State.
In the absence of a statutory definition of consumers in this context, the popular and prevailing meaning was the general public who bought at retail and ultimately used the electricity generated, not the wholesalers to whom the taxpayer intended to sell the electricity. If there were ambiguities in the interpretation more favorable to the taxpayer had to be followed.
The fact that some plants would be taxed at 25% of fair market value while the taxpayer’s plant would be taxed at 15% did not violate a state constitutional provision requiring the same class of property to be taxed uniformly.
Under the constitution’s property classification provisions, power plants considered to be public service property were not in the same class as power plants considered to be other property.
(Cleco LLC v Tax Commission, S. Ct, Dkt., #01-C-2162, 4/02)
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Protest Payments...
A new rule adopted by the Department provides that when checks used to make tax payments, under protest, are returned unpaid by the bank on which they are drawn, for any reason related to the account of which the check is written, such action will be treated as a failure to remit the tax.
(Admin Code 61:I.4908, 2/02)
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Senior Citizens...
Although no one in this organization qualifies as a “senior citizen”, some of us are certainly approaching retirement. And who knows, God is good…with his help maybe we all will some day qualify.. (some of us sooner than others).
The Department has amended a rule to clarify that persons age 65 or older, who want and qualify for the special assessment level provided under Article VII of the State Constitution, must annually file an application for that special assessment.
(LA Register, Vol 27, #12, 12/01, Admin Code 61:V.309(F))
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Farm Products...
Act #116 of the First Extraordinary Session amends RS 3:493, relative to consumer selling and applicable permits and fees….
Any trucker, farmer, or producer of fruits, vegetables, grains, or meats in this state, or any employee of such farmer or producer, may sell the produce or products in any quantities direct to any consumer in this state, whether roadside, at a farmers market, or other direct means, and no state, parochial, or municipal authority shall require the payment of any permit fee, license tax or fee, or inspection fee of any kind or character whatsoever. Any such person may sell the produce, whether raw or processed, and shall not be required to pay an occupational license tax. Any state, parochial, or municipal authority having the power, or charged with the duty, may at its own expense inspect the produce or products above mentioned, the inspection to be made at such time and in such manner as may least inconvenience the producer. Within the limit of any municipality having ordinances regulating the hours within which the produce or products above mentioned may be sold, the trucker, farmer, or producer, or any employee of such farmer or producer, shall sell the produce or products only between the hours of eight o’clock a.m. and six o’clock p.m.
Very interesting…while this amendment will have little impact on you city folks, the rest of us will be touched a bit...
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Legislative Message...
In his address to the Regular Session of the 2002 Legislature, Governor Mike Foster endorsed the tax cut proposals in the Dewitt-Hammett-LeBlanc plan. He said this plan would phase out taxes on groceries and household utilities, which disproportionately affect the poor. It would also phase out the sales tax on manufacturing machinery and equipment, which the Governor noted represents the most significant business tax impediment to economic growth. The plan would phase back in the state income tax credit for federal itemized deductions. According to the Governor, the plan also would end the fiction of temporary taxes. The Governor stressed that the plan would cut taxes in a manner that is sensitive to Louisiana’s economic conditions. As the economy expanded, taxes would be cut. If the economy expanded rapidly, taxes would be cut deeper and faster.
(And who said he couldn’t seek another term, it certainly sounds as if he is running for something to me…)
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State Vendors Compensation...
Act #99 of the First Extraordinary Session amends RS 47:306(A)(3)(a) and (B)(4), relative to compensation for timely reporting…
306 (A)(3)(a) …”For the purpose of compensating the dealer in accounting for and remitting
the tax levied by this Chapter, each dealer shall be allowed one and one-tenth percent of the amount of tax due and accounted for and remitted to the secretary in the form of a deduction in submitting his report and paying the amount due by him, provided the amount of any credit claimed for taxes already paid to a wholesaler shall not be deducted in computing the commission allowed the dealer hereunder. This compensation shall be allowed only if the payment of the dealer is timely filed.”
306(B)(4) … “Manufacturers, wholesalers, jobbers, and suppliers collecting advance sales taxes as hereinablove provided shall be allowed a one and one-tenth percent deduction from the amount so collected and remitted to the secretary as compensation for such collection. This compensation shall be allowed only if the payment of the manufacturer, wholesaler, jobber, or supplier is timely filed.”
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Crude Oil Products Refined...
A transportation & communication utilities tax did not apply to revenue that a pipeline company received from transporting chemicals and other finished products derived from crude oil.
The taxpayer claimed that the term “oil” was restricted to crude oil, while the Department argued that it included the crude and refined petroleum products at issue. Both positions may have been a reasonable interpretation.
RS 47:1003 defined taxable public utility “pipelines” to mean “any person engaged in the business of transporting oil within this state for hire.”
Under a well settled rule of statutory construction, taxing statutes had to be strictly construed against the taxing authority in situations such as this, where statutory language was susceptible to more than one reasonable interpretation.
With this in mind, the construction favorable to the taxpayer was adopted and the meaning of the term “oil” was restricted to exclude products refined from crude oil.
(Shell Pipeline v Kennedy, La.App, 1st Dist, Dkt#2000 CA0948R,5/02)
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Franchise Tax Vacation Ruling...
For most this little dab of information will be of no value…for those of us in the accounting arena it is at lease interesting… If employees are at risk of losing their accrued vacation pay, it cannot be thought of as a definitely fixed liability. Therefore, such accrued vacation pay must be included in the computation of surplus and undivided profits for corporation franchise tax purposes.
However, if accrued vacation pay is accounted for by the employees, debited and credited as each employee uses and earns it, and employees are certain to be compensated for the accrued amount in addition to regular pay if they fail to take an earned vacation, such accrued vacation pay must be considered a definitely fixed liability and therefore to be indebtedness.
If the accrued vacation pay is indebtedness, the provisions of RS 47:603 determine to what extent it is included in taxable capital.
(Revenue Ruling 02-006,5/02)
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Local Rate Changes...
Union Parish increased the parish portion of its sales and use tax rate to 4% up from 3.5%, effective April 1, 2002. The total state and local tax rate in the Town of Junction and Marion has been increased to 9% (was 8.5%). The rate in the Town of Bernice increased to 10% (was 9.5%) and the Farmerville rate has increased to 9.5% up from 9%.
The total state and local tax in the rest of Union Parish increased to 8% from 7.5%.
(Public Safety Dept, 4/02)
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