The Procurement Processing Company Rebate Program is enacted for Louisiana sales and use tax purposes. The Secretary of the Louisiana Department of Economic Development is authorized to enter into a contract with a procurement processing company (PPC) to recruit to Louisiana purchasing companies that will have a significant positive economic benefit to the state and will generate sales of items subject to sales and use taxes. The rebate will be calculated and paid by the Louisiana Department of Revenue (department). The initial term of a contract cannot exceed 20 years and is renewable for up to an additional 20 years. The contract will provide an incentive to the PPC that will be paid in the form of a rebate of a portion of the state sales and use taxes collected on new taxable sales by a purchasing company that is managed by a PPC. The contract is required to include a provision under which the PPC expressly acknowledges that if it receives a rebate for new taxable sales, in no event will the taxes on such new taxable sales remitted to Louisiana by the company or affiliated entity constitute an overpayment.
Certification of Sales
The secretary will determine the amount of incentive rebates to be paid to a PPC pursuant to the contract. The department is required to certify the amount of new taxable sales involved and determine the amount of tax rebate to be paid to the PPCs from the sales taxes generated by the operations of the PPCs in the state. Rebate payments will be based upon the amount of new taxable sales that are certified by the secretary. If, after a rebate has been paid, the department determines that certain items included in the rebate payment did not constitute new taxable sales, the amount rebated for those items will be recaptured by the department from the PPC, subject to the prescriptive period.
“New taxable sales” are defined, for these purposes, as the sale of goods and services upon which state sales and use tax is paid under Title 47 of the Louisiana Revised Statutes and that would not have occurred in the state but for the operation in the state of a PPC. The term does not include any sales or purchases of services or property upon which such sales and use tax would have been due if the PPC was not operating in Louisiana.
“Procurement processing company” is defined as a company engaged in managing the activities of unrelated purchasing companies. “Purchasing company” is defined as a company engaged in the activity of selling property and services to affiliated entities.
Act 800 (H.B. 754), Laws 2012, effective July 1, 2012