Did truck trips conducted entirely within another state count toward Louisiana's 80% interstate-commerce threshold for the heavy-truck sales-tax exemption?

Plain-English summary

Mileage from a commercial truck trip conducted entirely within another state did not count as interstate-commerce mileage for Louisiana's heavy-truck sales-tax exemption.

The truck began and ended in the same non-Louisiana state, never crossed a state line, and carried property that had come to rest before the trip and again came to rest at the destination.

The Department treated that use as intrastate transportation even though it occurred outside Louisiana. It therefore could not help the truck meet the statutory 80% interstate-use threshold.

The interstate-commerce definition

The ruling used the U.S. Department of Transportation definition adopted in an earlier Louisiana revenue ruling. Interstate commerce included transportation between a state and a point outside it, between two in-state points through another state or country, or between two in-state points as part of transportation originating or terminating outside the state or United States.

The sample trip met none of those categories.

Common questions

Q: Did out-of-state mileage automatically count as interstate mileage?

A: No.

Q: Did the truck cross a state line in the ruling's facts?

A: No.

Q: Was the property part of an ongoing interstate movement?

A: Not on the stated facts. It had come to rest before the trip and again at the destination.

Q: What threshold did the 2005 statute require?

A: At least 80% use in interstate commerce for the qualifying equipment described.

Citations and references

• La. R.S. 47:305.50(A) — heavy-truck interstate-commerce exemption
• Louisiana Revenue Ruling 04-005 — earlier adoption of the USDOT definition, as stated in this ruling

Source

• Landing page: Louisiana Department of Revenue Policies
• Original PDF: LA Revenue Ruling 05-004

Original ruling text

Revenue Ruling
No. 05-004
August 19, 2005
Sales and Use Tax
Eligibility of Trucks Used in Other States for Sales Tax Exemption Under La.
Rev. Stat. Ann. § 47:305.50(A)
The purpose of this Revenue Ruling is to discuss whether commercial transportation by
certain heavy trucks solely within the borders of other states constitutes interstate commerce for purposes of the Louisiana sales and use tax exemption eligibility of those trucks.
Governing Law
La. Rev. Stat. Ann. § 47:305.50(A) provides a sales and use tax exemption, under certain
conditions, for trucks of a gross weight of 26,000 pounds or more, for trailers used with
those trucks, and for contract carrier busses that are used at least eighty percent of the time
in interstate commerce. The statute provides that the activities of the trucks and trailers
must be regulated by the United States Department of Transportation. The busses are required by the statute to also have a gross weight of at least 26,000 pounds and a passenger
capacity of at least 35 persons.
Facts
A truck is used in a state other than Louisiana for commercial transportation that begins
and ends within that other state, without the truck ever crossing state lines. The property
that is shipped in this instance has come to rest at its point of origin in the other state and,
after shipment, again comes to rest at its destination in that other state. Such use constitutes
the exclusive or majority use of the truck.
Issue
Shall the mileage run by trucks in the other states be considered mileage in interstate
commerce for purpose of meeting the “eighty percent of the time in interstate commerce”
qualifying threshold for sales tax exemption under La. Rev. Stat. Ann. § 47:305.50(A)?
Analysis
The United States Department of Transportation (“USDOT”) defines “interstate commerce” as “trade, traffic, or transportation in the United States: 1) between a place in a
state and a place outside of such state (including a place outside of the United States); 2)
between two places in a state through another state or in a place outside of the United
States; or 3) between two places in a state as part of trade, traffic, or transportation originating or terminating outside the state or the United States.” In Revenue Ruling No. 04005, the department has adopted this definition of “interstate commerce” for purposes of
the state sales tax exemption provided by La. Rev. Stat. Ann. § 47:305.50(A).

Revenue Ruling No. 05-004
Page 2 of 2

Ruling
Commercial truck transportation from a point of origin in a state other than Louisiana to a
destination in the same state is not interstate commerce transportation, as that term is defined by the USDOT. Accordingly, such mileage cannot be considered mileage in interstate commerce for purpose of meeting the “eighty percent of the time in interstate commerce” qualifying threshold for sales tax exemption under La. Rev. Stat. Ann. §
47:305.50(A).
Questions concerning this matter can be directed to the Policy Services Division at 225219-2780.
Cynthia Bridges
Secretary
By:

Raymond E. Tangney
Senior Policy Consultant
Policy Services Division