§305.10. Exemptions; property purchased for first use outside the state

            A. There shall be no sales or use tax due upon the sale at retail or use of tangible personal property, including diesel fuel, or digital products purchased within or imported into Louisiana for first use exclusively beyond the territorial limits of Louisiana as specifically provided hereinafter in this Section.

            B. If the first use of tangible personal property purchased within or imported into Louisiana for first use beyond the territorial limits of the state occurs in a state which imposes a sales or use tax, the exemption provided herein shall apply only if:

            (1) The purchaser is properly registered for sales and use tax purposes in the state of use and regularly reports and pays sales and use tax in such other state; and

            (2) The state in which the first use occurs grants on a reciprocal basis a similar exemption on purchases within that state for use in Louisiana; and

            (3) The purchaser obtains from the secretary of the Department of Revenue a certificate authorizing him to make the nontaxable purchases authorized under this Subsection; or

            (4) The property is subject to registration as a motor boat subject to registration by the state of Louisiana and such property is not registered for use in this state.

            C.(1) If the first use of tangible personal property or digital products purchased within or imported into Louisiana occurs offshore beyond the territorial limits of any state, the exemption provided in this Section shall apply only if either of the following conditions are met:

            (a) The purchaser or importer has determined the location of the first use of the tangible personal property or digital product at the time of its purchase and has notified the vendor of that location.

            (b) The purchaser or importer has not determined the intended offshore location of first use at the time of purchase or importation, but has obtained from the secretary of the Department of Revenue an "offshore registration number" authorizing him to claim the exemption under the following conditions:

            (i) The offshore registration number shall be issued only if the purchaser or importer has shown, to the satisfaction of the secretary, that records, reports, and business practices are sufficient to permit verification that tangible personal property or a digital product purchased or imported tax-free pursuant to this Subsection is, in fact, being purchased or imported for use offshore beyond the territorial limits of any state. In cases of purchases of fungible goods, including vessel fuel and lubricants, the required records shall include purchase invoices, vessel logs, fuel usage records, fuel transfer records, and other reports and records that will enable the secretary to determine the amount of fungible goods consumed within Louisiana so as to be subject to the sales and use tax, and the amount of fungible goods delivered to or consumed at offshore locations beyond the territorial limits of the state, so as not to be subject to the sales and use tax. For purposes of this Section, the term "fungible goods" means goods of which any unit is unidentifiable and is, from its nature or by mercantile custom, treated as the equivalent of any other unit and shall include crude petroleum and its refined products.

            (ii) The offshore registration number issued by the secretary pursuant to this Subsection may be revoked by the secretary at any time if the purchaser or importer fails to meet the conditions set herein, or if the secretary finds that the purchaser or importer is consistently using the certificate to purchase or import tax-free tangible personal property or digital products for first use in state.

            (iii) If the offshore registration number is revoked, all tangible personal property or digital products purchased or imported tax-free under this Paragraph and in the possession of the purchaser or importer within this state shall be deemed taxable unless otherwise exempt pursuant to the provisions of Subparagraph (a) of this Paragraph. If the provisions of Subparagraph (a) of this Paragraph are not complied with, any subsequent purchase or import of tangible personal property will be taxable, whether for instate or offshore use, until the certificate and offshore number are reissued.

            (iv) Whenever there is a conflict between a purchaser or importer and the secretary as to whether an offshore registration number shall be issued, reissued, or revoked, it shall be the responsibility of the purchaser or importer to show that he meets the conditions and requirements provided in this Section for having and retaining the certificate and offshore registration number.

            (2) Except for purchases or importation of tangible personal property or digital products in accordance with Subparagraphs (1)(a) and (b) of this Subsection, any purchase or importation of property is taxable at the time of purchase or import unless otherwise exempt.

            D. If tangible personal property or digital products purchased or imported tax-free pursuant to the provisions of this Section are subsequently used for any taxable purpose within the state, use tax shall be paid by the purchaser or importer as of the time of its use in this state. Storage of property purchased or imported tax-free pursuant to this Section which is ultimately used in another state will be considered a "subsequent use for a taxable purpose".

            E. If tangible personal property or digital products purchased within or imported into the state tax-free pursuant to the provisions of this Section are later returned to Louisiana for use for a taxable purpose, the property shall be subject to the Louisiana use tax as of the time it is brought into the state, subject to the credit provided in R.S. 47:303(A).

            F. "Use for a taxable purpose" shall not include, for purposes of this Section, transportation beyond the territorial limits of the state; transportation back into the state; and repairing, modifying, further fabrication, and storing for first use offshore beyond the territorial limits of any state. Storage and withdrawal from storage for first use offshore beyond the territorial limits of any state is not a taxable use for purposes of this Section. Charges for repairs in Louisiana to tangible personal property for use in offshore areas are taxable, except those described in R.S. 47:305(H).

            G. If fungible goods are purchased or imported tax-free for use or consumption at locations both within Louisiana and offshore beyond the territorial limits of any state, under the exemption certificate and offshore registration number provided for in this Section, only that portion of the fungible goods delivered to a location offshore beyond the territorial limits of any state and used or consumed at that location shall be exempt. For the purpose of this Section, the term "fungible goods" means goods of which any unit is unidentifiable and is, from its nature or by mercantile custom, treated as the equivalent of any other unit and shall include crude petroleum and its refined products.

            H. The secretary of the Department of Revenue shall promulgate rules and regulations necessary for the implementation of this Section.

            I. The exemptions from the state sales and use tax provided in this Section shall be applicable to any sales and use tax levied by a local political subdivision or school board.

            Added by Acts 1964, No. 172, §1. Acts 1985, No. 631, §1, eff. July 16, 1985; H.C.R. No. 55, 1986 R.S.; Acts 1997, No. 658, §2; Acts 2005, No. 457, §1, eff. July 11, 2005; Acts 2024, 3rd Ex. Sess., No. 10, §1, eff. Dec. 4, 2024; Acts 2024, 3rd Ex. Sess., No. 11, §2, eff. Dec. 4, 2024.