Volume 21 Number 3 - Louisiana Department of Revenue

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○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○Nonprofitorganizations aregenerally notexempt from salestaxesNonprofit organizations aregranted an exemption from thepayment of income taxes underInternal Revenue Code Section 501(c).However, these organizations are notexempt from the payment of state andlocal sales taxes, except under certaincircumstances specifically provided forin the sales tax statutes. These specificcircumstances include:• Purchases of bibles, songbooks, andliterature by churches and synagogues.• Purchases made by certain shelteredworkshops.Churches and other nonprofit organizationsoften assume that they are exemptfrom state and local sales taxes, andmisinform their vendors to that effect.Any vendor who is presented with anexemption certificate that does not appearto be genuine, or is offered nocertificate at all, should contact the Departmentof Revenue’s Sales Tax Divisionat (225) 925-7356 to verify that the nonprofitorganization claiming an exemptionis entitled to do so.Revenue Ruling No. 01-002May 18, 2001Certain Lump Sum Distributions NotTaxableThis Revenue Ruling addresses the taxation of lump sum distributions paid toa Louisiana domiciliary for state income tax purposes. For purposes of thisruling, a lump sum distribution is defined as provided by IRC 402(e)(4)(D)(i).Such distributions often occur from qualified pension or profit sharing plans upon theretirement or death of a covered employee.Louisiana individual income tax is based on tax table income. The computation oftax table income begins with federal adjusted gross income and makes certainmodifications. The Louisiana Revised Statutes, Title 47, Section 293 defines adjustedgross income as the adjusted gross income of the individual for the taxable year thatis reportable on the individual’s federal income tax return. No modifications aremade for lump sum distributions. To the extent that lump sum distributions are notproperly includable in the federal adjusted gross income, such distributions are notincluded in tax table income.Couple arrested for failing to pay$1.6 million dollars in state taxesOn April 19, 2001, Louisiana state police arrested Lawrence D. Smith, 53,of 3548 Lost Creek Blvd., Austin, TX and his wife Brenda H. Smith, 48, (sameaddress) on one count each of evasion of tax and one count each of filing falsepublic documents.An investigation by the Louisiana Department of Revenue alleges that the Smith’ssold their shares of stock in McCormick & Company, Inc., which controlled theAlexandria Daily Town Talk newspaper, in Alexandria, LA. The Smith’s netted morethan $16 million as a result of the sale, but failed to report this taxable income to thestate. The charges allege that the Smiths filed a 1996 nonresident/part-year individualincome tax return in an attempt to defraud the state out of $708,225 in state taxes,which was the amount of state tax owed on the $16 million. Fees, penalties, andinterest make the total now due $1,658,172.55.Ragley man guilty of tax chargesCraig M. Fontenot, 32, of 17481 Hwy. 171, Ragley, LA, pleaded guilty onFebruary 5 to theft, failure to account for municipal monies, evasion ofincome and sales taxes, and filing false public records in relation to hisembezzlement of $535,770 in funds from Condea Vista Plant in Lake Charles.Fontenot, a former warehouse clerk at Condea Vista, fraudulently manipulated theplant’s computer system in order to have payments made to two “shell” companieshe had established. Fontenot operated alone in the embezzlement scheme fromapproximately February 1997 through April 1999.After Fontenot pleaded guilty, Judge Wilford Carter of the 14 th Judicial District courtin Lake Charles ordered a pre-sentence investigation prior to formal sentencing. It isexpected that a determination with regard to restitution will be made at the time ofsentencing.2
○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○Advance sales tax requirementsOut-of-state retail sellers whohave established “substantialnexus” in Louisiana qualify asdealers in Louisiana and are required topay the state advance sales tax on theirpurchases for resale that are delivered toLouisiana. They are also required to collectand remit sales tax on their taxablesales to Louisiana customers.The state advance sales tax is recoverableby claiming a credit on the state salestax return that is required to be filed withthe Department. “Substantial nexus” isestablished through a number of businessactivities, including the operation of abusiness location in the state; havingpersonal representation in the state; maintainingan inventory in the state of propertyfor sale, lease, or rental; sellingtaxable services or leasing or rentingproperty in the state; delivering propertyinto the state in personally owned orcontrolled vehicles; making intrastatesales to vending operators; or throughthe buying of property from Louisianawholesale suppliers and the selling ofthat property in the intrastate commerceof the state.If out-of-state retail sellers have notestablished nexus in Louisiana so as to beclassified as dealers in the state, theycannot be required to collect and remitthe sales or use tax on their sales toLouisiana customers, nor can they berequired to pay the advance sales tax totheir wholesale suppliers. To be exemptfrom paying advance sales tax on purchasesfor resale, sellers must certify inwriting to their wholesale suppliers thatthey have not established substantial nexusin Louisiana.In a case where an out-of-state sellerpurchases tangible personal property froma Louisiana in-state wholesale dealer anddirects the dealer to ship the propertydirectly to the seller’s Louisiana in-statecustomer, the out-of-state seller is requiredto remit the state advance sales taxto their Louisiana supplier. The out-ofstateseller will, in this case, be requiredto collect the appropriate sales tax, file aLouisiana sales tax return, and remit thetax that is due on intrastate sales.For further information about advancesales tax, contact the Sales Tax Divisionat (225) 925-7356.Regional OfficesAlexandria900 Murray Street, Room B-100(318) 487-5333Baton Rouge (Main Office)330 N. Ardenwood Drive(225) 925-7318Baton Rouge Regional Office8490 Picardy Avenue, Bldg. 600(225) 763-5700Lafayette825 Kaliste Saloom Road, Brandywine IIISuite 150(337) 262-5455Lake CharlesOne Lakeshore Drive, Suite 1550(337) 491-2504Monroe122 St. John Street, Room 105(318) 362-3151New Orleans1555 Poydras Street, Suite 900(504) 568-5233Shreveport1525 Fairfield Avenue(318) 676-7505Thibodaux1418 Tiger Drive(985) 447-0976Inheritance tax may be filed atRegional OfficesInheritance and Estate TransferTax Returns may be filed at anyregional office of the Departmentof Revenue. Regional offices areauthorized to issue inheritance tax receiptsprovided a complete return is filedand accompanied with:1. an affidavit of death and heirship;2. a petition for possession (Act 314 of1995 amended Article 2951 of theCode of Civil Procedure to authorizethe filing of a tableau of distributionor certain trust instruments in lieu ofa petition for possession);3. a sworn detailed descriptive list orinventory of assets;4. a copy of a will, if any; and,5. a copy of the federal estate tax return,when required.However, regional offices are prohibitedfrom issuing an inheritance tax receiptif:1. one of the previously mentioned documentsis missing;2. a partial possession is being requested;3. an installment agreement is being requested;4. the waiver of interest is being requested;or,5. prescription of taxes is being claimed.For further information about inheritancetax, call the Inheritance Tax Sectionat (225) 925-7424, or write to: LouisianaDepartment of Revenue, Inheritance TaxSection, P. O. Box 201, Baton Rouge, LA70821.3File yourLouisiana Sales Tax Returnthrough the Internet atwww.rev.state.la.usFor more information, call(225) 925-7356.
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Volume 21 Number 3 - Louisiana Department of Revenue

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