SouthCentral Louisiana, Baton Rouge, LA

  • 1.  Louisiana Sales Tax

    Posted 07-24-2017 10:22
    With the sales tax changes in 2016, does anyone know if there's a way to treat a contract with a GMP (guaranteed maximum price) the same as a lump-sum contract, to avoid the additional 1% sales tax on contracts entered into before 4/1/16?  Does anyone have any experience with this?  If so, please respond to this, or email Greg Beyer directly at gbeyer@laporte.com.  Thank you.

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    Daniel Williams, CPA, CCIFP
    Audit Director
    LaPorte CPAs & Business Advisors
    Baton Rouge, LA
    (225) 761-7398
    dwilliams@laporte.com
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  • 2.  RE: Louisiana Sales Tax

    Posted 07-25-2017 09:56
    Hi Daniel,

    I don't have much experience with GMPs, but I have worked with the exemption for existing contracts before 4/1/16 (RS 47:305.11).  If the contract was entered into before 4/1/16 there's an application for the exemption.  I'm not sure how the application would be treated coming in now, and if approved it would probably require amending past sales tax returns between April 2016 and now. I think if you can show that the contractor made an agreement with a customer at certain prices, and those prices were based on the 4% sales tax rate, you may be fine.  I had good luck with talking to the LA Dept of Rev when I called for some clarifications at the time.

    -David

    Language of application:
    Louisiana Revised Statute 47:305.11 provides that no new or additional sales or use tax shall be applicable to sales of materials or
    services involved in lump sum or unit price construction contracts entered into prior to and within ninety days of the effective date
    of the statute levying the new or additional sales/use tax. The contract must be a lump sum or unit price construction contract. The
    contract must involve contractual obligations that were undertaken prior to the effective date of the tax imposition. The contract must
    also have been bid on the basis of sales taxes at the rates effective and existing prior to the effective date of the imposition.
    Please complete the application below and return it to the address above along with a copy of the executed contract attached.

    Link to application: http://revenue.louisiana.gov/TaxForms/1075(4_16)F.pdf


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    David Buckingham
    Accounting Manager
    Insulations Inc.
    Harahan LA
    (504) 293-4247
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    Original Message