Could Lake Charles apply a manufacturing-equipment tax exclusion to part of the city, choose fewer exclusions, or phase them in?

Plain-English summary

Lake Charles's mayor asked whether the city could limit a manufacturing-machinery sales and use tax exclusion to one geographic area, choose only some of the state-law exclusions, and decide when they took effect. In an opinion released in 2006, the Attorney General said it found no law prohibiting an exclusion for only a portion of the city. Its conclusion on that geographic question was framed as the result of its research, not as a ruling on every possible local tax arrangement.

The AG also read La. R.S. 47:337.10(I) to let political subdivisions select any combination of the listed exclusions. The statute expressly allowed an exclusion to take effect upon adoption or enactment, or to be phased in over time in the adopting instrument. The opinion said the cited constitutional uniformity provision restricted the legislature's exemption authority, not political subdivisions.

Currency note

This opinion was issued in 2006. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy.

Common questions

Did the AG say an exclusion had to cover all of Lake Charles?

No. It reported that its research found no provision barring a local exclusion for only a geographic portion of the city.

Did a political subdivision have to adopt every listed manufacturing-equipment exclusion?

No. The opinion read "any combination of these or all of them" in La. R.S. 47:337.10(I) to permit fewer than all of the listed exclusions.

Could the city start the exclusions gradually?

Yes. The AG quoted the statute's choice between an exclusion effective upon adoption or enactment and one phased in over time as set out in the adopting instrument.

Why did the constitutional uniformity provision not prohibit the local choice?

The opinion read Article VI, Section 29(D) as a limitation on exemptions and exclusions made by the legislature; it said that provision did not apply to political subdivisions.

Background and statutory framework

The request concerned local sales and use tax exclusions for eligible manufacturing machinery and equipment under La. R.S. 47:337.10(I), with reference to three exclusion provisions in La. R.S. 47:301. The AG separated the geographic, selection, and effective-date questions and answered each under the cited statute and constitutional provision.

Citations

• La. R.S. 47:337.10(I) (local manufacturing-equipment exclusion authority).
• La. R.S. 47:301(3)(i), (13)(k), and (28) (referenced state exclusions).
• Article VI, Section 29(D) of the Louisiana Constitution (exemptions and uniformity).

Source

• Landing page: https://www.ag.state.la.us/Opinions
• Original PDF: https://www.ag.state.la.us/Opinion/Download/05-0239

Original opinion text

April 28, 2006
OPINION NUMBER 05-0239

90-A POLITICAL SUBDIVISIONS
160 TAXATION – Sales
Hon. Randy Roach
La. R.S. 47:337.10(I)
Mayor, City of Lake Charles
Discussion of sales and use tax exemptions
P.O. Box 900
provided for under La. R.S. 47:337.10(I).
Lake Charles, Louisiana 70602-0900

Dear Mayor Roach:

You requested an Attorney General’s opinion regarding La. R.S. 47:337.10(I), which pertinently provides:

I. A political subdivision may provide for a sales and use tax exclusion as provided for in R.S. 47:301(3)(i), (13)(k), or (28), or any combination of these or all of them, for the sales, cost, or lease and rental price of manufacturing machinery and equipment, either effective upon adoption or enactment or phased in over a period of time as set forth in the instrument providing the exclusion.

This provision of law provides for the reduction or exclusion of local sales and use taxes on eligible machinery and equipment in political subdivisions that enact provisions of local law authorizing exclusions similar to the state sales and use tax exclusions contained in La. R.S. 47:301(3)(i), (13)(k), or (28).

As we understand your correspondence, you would like this office to address the following issues:

1. Does La. R.S. 47:337.10(I) authorize a political subdivision to provide for local
   sales and use tax exclusion “as provided for in R.S. 47:301(3)(i), (13)(k), or (28),
   or any combination of these or all of them for the sales, cost, or lease and rental
   price of manufacturing machinery and equipment” within only a geographical
   portion of the political subdivision? Specifically, you question whether the
   adoption of an exclusion within only a portion of the political subdivision would be
   a violation of Article VI, Section 29(D)(1) of the Louisiana Constitution.

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Hon. Randy Roach
OPINION NUMBER 05-0239
Page - 2 -

2. Would it be legal to provide for less than all of the tax exclusions set forth in La.
   R.S. 47:301(3)(i), (13)(k), or (28)?

3. Can the City of Lake Charles alter the effective date of the tax exclusions by
   having the entire exclusion effective immediately or “phased in” over a period of
   time?

To answer your first question, this office is unaware of, and our research did not reveal, any provision of law which would prohibit the City from providing for local sales and use tax exclusions within only a geographical portion of the city. The constitutional provision you referenced, Article VI, Section 29(D), provides:

(D) Exemptions; Protection of Bonds. Except when bonds secured thereby have been authorized, the legislature may provide for the exemption or exclusion of any goods, tangible personal property, or services from sales or use taxes only pursuant to one of the following:

(1) Exemptions or exclusions uniformly applicable to the taxes of all local governmental subdivisions, school boards, and other political subdivisions whose boundaries are not coterminous with those of the state.

(2) Exemptions or exclusions applicable to the taxes of the state or applicable to political subdivisions whose boundaries are coterminous with those of the state, or both.

(3) Exemptions or exclusions uniformly applicable to the taxes of all the tax authorities in the state.

This section is a limitation on the legislature’s authority to provide for exemptions and exclusions. It does not apply to political subdivisions.

To answer your second question and third questions, we must refer to the language of the statute. La. R.S. 47:337.10(I) grants political subdivisions authority to provide for sales and use tax exclusions “as provided for in R.S. 47:301(3)(i), (13)(k), or (28), or any combination of these or all of them”. It is the opinion of this office that this language allows political subdivisions to provide for less than all of the tax exclusions set forth in La. R.S. 47:301(3)(i), (13)(k), or (28). As for the effective date of the exclusions, La. R.S. 47:337.10(I) provides that the exclusions may be “either effective upon adoption or enactment or phased in over a period of time as set forth in the instrument providing the exclusion.” Therefore, the exclusion may be effective immediately or phased in over a period of time.

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Hon. Randy Roach
OPINION NUMBER 05-0239
Page - 3 -

Trusting this adequately responds to your request, we remain

Yours very truly,

CHARLES C. FOTI, JR.
ATTORNEY GENERAL

BY: _________
KENNETH L. ROCHE, III
Assistant Attorney General

CCF, JR/KLR, III/jv

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OPINION NUMBER 05-0239

90-A POLITICAL SUBDIVISIONS
160 TAXATION – Sales Tax

La. R.S. 47:337.10(I)

Discussion of sales and use tax exemptions provided for under La. R.S. 47:337.10(I).

Hon. Randy Roach
Mayor, City of Lake Charles
P.O. Box 900
Lake Charles, Louisiana 70602-0900

Date Received:

Date Released: April 28, 2006

KENNETH L. ROCHE, III
ASSISTANT ATTORNEY GENERAL