What disclosures and records did a Louisiana dealer need when advertising that it would absorb sales or use tax for a purchaser?

Plain-English summary

A dealer could advertise that it would absorb all or part of the tax only by clearly accepting liability to remit the purchaser's unpaid amount and documenting that amount for the purchaser.

The dealer remained responsible for paying the tax; the promotion did not eliminate the tax.

Advertisement requirement

The advertisement or other public statement had to say that any tax not paid by the purchaser would be remitted on the purchaser's behalf by the dealer.

Customer writing

The dealer had to give written evidence that it was liable for and would pay the unpaid tax. An invoice or sales ticket could supply that evidence, but it had to separately show the amount the dealer agreed to remit.

A generic statement such as “All taxes included” was not acceptable.

Audit records and customer classes

The dealer retained the customer invoice or writing and a copy of the advertisement, declaration, or other public communication. The ruling also said the offer should not be restricted to a particular class of persons.

Common questions

Q: Did absorbing the tax mean no tax was due?

A: No. The dealer paid the purchaser's unpaid portion.

Q: Was “All taxes included” enough on the receipt?

A: No.

Q: What records were needed for audit?

A: The purchaser writing showing the separate tax amount and the advertisement or other public statement.

Citations and references

• La. R.S. 47:304(F) — dealer tax-absorption conditions
• Act 245 of the 2001 Regular Session
• LAC 61:III.101.C — Revenue Ruling authority and reliance statement

Source

• Landing page: Louisiana Department of Revenue Policies
• Original PDF: LA Revenue Ruling 01-016

Original ruling text

Revenue Ruling
No. 01- 016
November 15, 2001
Sales and Use Tax

Dealers Allowed to Absorb Sales and Use Tax
Under Certain Circumstances
Act 245 of the 2001 Regular Legislative Session amended R.S. 47:304(F) to allow a dealer to absorb
all or part of the sales and use tax or to relieve the purchaser from paying all or any part of the tax
when the dealer has met certain conditions.
A dealer may advertise or make known to the public, either directly or indirectly, that he will absorb
the tax or relieve the purchaser from paying all or any part of the tax if:
a.

The dealer includes in the advertisement that any part of the tax not paid by the purchaser will
be remitted on behalf of the purchaser by the dealer; and

b.

The dealer provides the purchaser with written evidence that the dealer will be liable for and
will pay any tax that the purchaser did not pay. Written evidence may be printed on the
invoice or sales ticket.

Any dealer who advertises or makes known to the public that he will absorb the tax or will relieve the
purchaser from paying any part of the tax should retain sufficient records to show that he is in
compliance with the statute. In the event of an audit, the dealer will be required to furnish the
department with the following:
1.

A copy of the invoice or other written evidence that the dealer provided to the purchaser. The
amount of the tax that the dealer agreed to remit on behalf of the purchaser must be separately
shown on the invoice or other written evidence. Statements such as “All taxes included” are
not acceptable.

2.

A copy of the advertisement, declaration, or other means by which the dealer informed the
public that all or a part of the tax would be paid and remitted on behalf of the purchaser by the
dealer.

In addition to complying with the above provisions, a dealer should not restrict the offer to absorb the
tax or to relieve the purchaser from paying all or any part of the tax to a particular class of persons.
For further information, please contact the Policy Services Division at 225-219-2780.
Cynthia Bridges
Secretary
By:

Annie L. Gunn
Attorney
Policy Services Division

the public and to Department of Revenue employees. It is a written statement issued to apply principles of law to a specific
set of facts. A Revenue Ruling does not have the force and effect of law and is not binding on the public. It is a statement
of the department's position and is binding on the department until superseded or modified by a subsequent change in
statute, regulation, declaratory ruling, or court decision.