Frequently Asked Questions
My Louisiana Resale Certificate approval letter states, “Purchases for use or consumption are still taxable and you must pay tax at the time of purchase.” What does this mean?
Only purchases for resale can be purchased without payment of the state sales tax. Purchases that are used by the business are still subject to state sales/use tax, including items withdrawn from resale inventory for business use. If no state sales tax was paid at the time of purchase, sales/use tax is due on the value of the item withdrawn from resale inventory. For example: an office supply store withdraws copy paper from the resale inventory for use in the store manager’s printer. The office supply store would owe the state sales/use tax at the rate of 4.45% because the paper was “used” by the office supply store and was not resold to a customer.
Items withdrawn from the resale inventory that is used by the business should be reported on Line 2 of the state sales tax return at the cost price of the item(s).