Tax Applies to Chemical Catalyst in Louisiana

Tuesday, February 12th, 2019

 
 
Chemical additive being applied to solution.
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Louisiana
Manufacturing

The Louisiana Board of Tax Appeals recently ruled that sales tax was due on the purchase of a chemical catalyst.

The taxpayer was a business that manufactured polymers for resale. When making the polymers, the taxpayer used a catalyst to cause a chemical reaction that affected the polymers' structure. While traces of the catalyst ended up in the finished product, this was not the intent behind using it.

Louisiana provides a tax exclusion for the sale of materials for further processing into articles of tangible personal property for resale. To qualify for the exclusion, a product must be purchased for the purpose of becoming part of the end product. The ruling determined that the purpose of the catalyst was to cause a chemical reaction, not to become part of the end product.

The ruling also determined that the taxpayer's purchase of water for use in a cooling tower was exempt from tax. In Louisiana, the sale of water is exempt. However, tax applies to the sale of any water put in bottles, jugs, or containers. The ruling determined that piped water that ends up in a cooling tower is not put in a container. As a result, the water was exempt.

https://www.ttrus.com/tax-applies-to-chemical-catalyst-in-louisiana


About TTR

Transaction (buying or selling things), Tax (the tax on this activity), Resources (our people, our website, our support services) - TTR, Inc.

TTR has a website that companies subscribe to and use daily. This website provides a list of everything that can be bought or sold in the U.S. It provides simple answers to whether buying or selling these items is taxable (subject to a sales tax or other tax), and it provides all the legal authority to support these tax answers.

TTR likes to keep things simple and fun, which is why it has great people who provide help to clients on any support questions they have about transaction tax issues.

Please visit TTR on the web at www.ttrus.com or call 866.578.8193.

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