Louisiana—Sales and Use Tax: Taxpayer Entitled to Refund on Purchase of Caustic
LOUISIANA : A taxpayer was not required to remit Louisiana sales and use tax on its purchase of sodium hydroxide (caustic) because the taxpayer used the caustic as a pollution control device system (PCDS) at its manufacturing facility. Generally, for sales and use tax purposes the term sale at retail does not include the sale of a PCDS. Further, a PCDS means any tangible personal property approved by the Department of Revenue (department) and the Department of Environmental Quality (DEQ) and sold or leased and used or intended for the purpose of eliminating, preventing, treating, or reducing the volume or toxicity or potential hazards of industrial pollution of air, water, groundwater, noise, solid waste, or hazardous waste in the state of Louisiana. In this matter, the taxpayer claimed a tax refund stating that the caustic it purchased was a PCDS, and therefore, exempt. The department submitted the taxpayer’s refund claim to the DEQ, and it was noted that chemicals were not eligible for the PCDS exemption. On appeal, it was noted that the DEQ’s interpretation of the law concerning the exemption was inaccurate. Since the caustic was used for the purpose of pollution control the DEQ incorrectly denied the taxpayer’s refund.
Monsato Company v. Department of Revenue, Board of Tax Appeals (Louisiana), No. 11389D, April 14, 2021
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