Louisiana Utility Sales Tax Exemption
Louisiana provides a sales tax exemption on electricity, natural gas, water, and steam when used directly in manufacturing processes. This exemption is authorized under La. R.S. 47:305(D)(1)(c). It applies only to utilities consumed in the actual manufacturing of tangible personal property. Utilities used in administrative offices, storage areas, or other non-production spaces do not qualify.
Utility Study Requirement
A utility study is generally required to document how utilities are consumed in qualifying production activities. The study should:
- List all equipment and processes using the utility.
- Separate production-related consumption from non-qualifying usage.
- Provide calculations showing the allocation of exempt versus taxable usage.
- Accurate documentation is essential to substantiate the exemption during an audit.
Filing Requirements
To claim the exemption, manufacturers must complete Form R-1070. Businesses may request a refund for up to 36 months (3 years). Refunds can be filed directly with the Louisiana Department of Revenue or coordinated through the utility provider. Supporting documentation, including usage studies and utility bills, must be retained to support refund claims.