CHAPTER 4. PROCUREMENT PROCESSING COMPANY

REBATE PROGRAM

§6351. Rebates; contracts for certain state sales and use tax rebates

A. Definitions. For purposes of this Section, the following words shall have the following meanings unless the context clearly indicates otherwise:

(1) "Affiliated entity" shall mean a person who, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with another person.

(2) "Department" shall mean the Department of Revenue.

(3) "New taxable sales" shall mean the sale of goods and services upon which state sales and use tax is paid under this Title and which would not have occurred in the state but for the operation in the state of a procurement processing company. The term "new taxable sales" shall not include any sales or purchases of services or property upon which such sales and use tax would have been due if the procurement processing company was not operating in the state.

(4) "Procurement processing company" means a company engaged in managing the activities of unrelated purchasing companies.

(5) "Purchasing company" means a company engaged in the activity of selling property and services to affiliated entities.

(6) "Secretary" shall mean the secretary of the Department of Revenue.

(7) "Significant positive economic benefit" means that net positive state tax revenues are to be generated from the new taxable sales.

B. Contract. (1) The secretary of the Department of Economic Development is authorized to enter into a contract with a procurement processing company to recruit to Louisiana, purchasing companies that generate sales of items subject to the taxes imposed under this Title the business of which shall have a significant positive economic benefit to the state. The initial term of a contract shall not exceed twenty years and shall be renewable for up to an additional twenty years. The contract shall provide an incentive to the procurement processing company which shall 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 which is managed by a procurement processing company.

(2) The contract shall include a provision whereby the procurement processing company expressly acknowledges that if it receives a rebate for new taxable sales under the provisions of this Section, in no event shall the taxes on such new taxable sales remitted to Louisiana by the purchasing company or affiliated entity constitute an overpayment as defined in R.S. 47:1621.

(3) Any contract between the procurement processing company and a purchasing company shall include a provision whereby the parties in such contract expressly acknowledge that if the procurement processing company receives a rebate for new taxable sales under the provisions of this Section, in no event shall the taxes on such new taxable sales remitted to Louisiana by the purchasing company or affiliated entity constitute an overpayment as defined in R.S. 47:1621.

C. Certification of sales. The secretary of the department shall determine the amount of incentive rebates to be paid to a procurement processing company pursuant to the contract. Rebate payments shall be based upon the amount of new taxable sales which are certified by the secretary.

D. Payment of rebate.

(1) Notwithstanding any provision of law to the contrary, the secretary of the department shall make the rebate authorized pursuant to the provisions of this Section from the state sales tax revenue generated by the new taxable sales occurring in this state as a result of the operation of a procurement processing company in Louisiana.

(2) 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 shall be recaptured by the department from the procurement processing company, subject to the prescriptive period set forth in R.S. 47:1561.2.

(3) Notwithstanding any provision of law to the contrary, if a procurement processing company receives a rebate for new taxable sales under the provisions of this Section, in no event shall the taxes on such new taxable sales remitted to Louisiana by the purchasing company or affiliated entity constitute an overpayment as defined in R.S. 47:1621.

E. The Department of Revenue may promulgate rules and regulations in accordance with the provisions of the Administrative Procedure Act as are necessary to implement the provisions of this Section.

F. Administrative expenses. From the collections of new state sales tax revenue generated by new taxable sales as a result of the activities of purchasing companies pursuant to the provisions of this Section, the secretary of the department is authorized to retain an amount necessary to provide for the expenses the department shall incur in the administration of the provisions of this Section. Such monies are hereby designated to be self-generated revenues of the department.

NOTE: Subsection G eff. until July 1, 2020. See Acts 2018, No. 612.

G. Disposition of collections resulting from new taxable sales.

The state sales tax revenues generated as a result of the activities of purchasing companies pursuant to this Section which are deposited into the state general fund shall thereafter be disbursed during each fiscal year in the following order of priority:

(1) The payment of rebates to procurement processing companies by the secretary of the Department of Revenue in accordance with the provisions of a contract, which payments shall be made from current sales tax collections pursuant to Paragraph (D)(1) of this Section.

(2) Retention by the department of amounts necessary to provide for the expenses of the department pursuant to the provisions of Subsection F of this Section.

(3) Of the monies remaining after satisfaction of the requirements of Paragraphs (1) and (2) of this Subsection as determined by the secretary pursuant to Subsection H of this Section, the state treasurer is hereby authorized and directed to transfer the amount of thirty million dollars, or as much thereof as is available, from the state general fund to the Unfunded Accrued Liability and Specialized Educational Institutions Support Fund-Specialized Educational Institutions Account, which is established pursuant to R.S. 39:100.136. Each fiscal year, the transfer shall occur as soon as is practicable, upon notification by the secretary of the Department of Revenue that revenues sufficient to provide for this distribution have been deposited into the treasury.

(4) Of the monies remaining after satisfaction of the requirements of Paragraphs (1) through (3) of this Subsection as determined by the secretary pursuant to Subsection H of this Section, the state treasurer is hereby authorized and directed to transfer from the state general fund to the Unfunded Accrued Liability and Specialized Educational Institutions Support Fund-UAL Account an amount equal to ten percent of the total remaining state sales tax revenues collected in and attributable to that fiscal year as a result of the activities of purchasing companies. The transfer shall occur no later than August tenth of each year.

NOTE: Subsection G eff. July 1, 2020. See Acts 2018, No. 612.

G. Disposition of collections resulting from new taxable sales.

The state sales tax revenues generated as a result of the activities of purchasing companies pursuant to this Section which are deposited into the state general fund shall thereafter be disbursed during each fiscal year in the following order of priority:

(1) The payment of rebates to procurement processing companies by the secretary of the Department of Revenue in accordance with the provisions of a contract, which payments shall be made from current sales tax collections pursuant to Paragraph (D)(1) of this Section.

(2) Retention by the department of amounts necessary to provide for the expenses of the department pursuant to the provisions of Subsection F of this Section.

(3) Of the monies remaining after satisfaction of the requirements of Paragraphs (1) and (2) of this Subsection as determined by the secretary pursuant to Subsection H of this Section, the state treasurer is hereby authorized and directed to transfer from the state general fund to the Unfunded Accrued Liability Fund an amount equal to ten percent of the total remaining state sales tax revenues collected in and attributable to that fiscal year as a result of the activities of purchasing companies. The transfer shall occur no later than August tenth of each year.

H. The availability of monies necessary to comply with the provisions of Subsection G of this Section shall be evidenced by the amount of state sales tax revenue generated by the new taxable sales upon which a rebate has been paid pursuant to this Section. The secretary is authorized and directed to estimate the amount of taxes which have been deposited into the state general fund as a result of such new taxable sales. Upon request, the secretary shall provide written notification to the state treasurer as to the amount of money available for the making of deposits as required by this Subsection.

Acts 2012, No. 800, §2, eff. July 1, 2012; Acts 2018, No. 612, §15, eff. July 1, 2020.