La. Admin. Code tit. 61 § I-2901
Current through Register Vol. 50, No. 11, November 20, 2024
Section I-2901 - Severance Tax on Timber, Pulpwood and Minerals Other Than Gas and OilA. In General 1. The severance tax imposed by R.S. 47:631 is an excise tax upon the privilege of severing any natural resources from the soil or water. All resources found in a natural state which are of any commercial value whatsoever are natural resources and are subject to the severance tax.2.a.Severance means the separation of the natural resource from the soil or water, or its removal from its natural position. For example, the dredging of sand from a river; the cutting of timber; or the mining or removal of a mineral from its natural location.
b. Severance does not refer to the refinement of a natural resource after its removal.3.Severer means any person engaged in the operation of severing natural resources from the soil or water, whether that person is the owner of the soil or water; or other person severing from the soil or water of another; or the owner of a natural resource severing from the soil or water of another.4. The tax is due by the severer, whether the natural resource is used by him or sold to another. If it is used by the severer, the tax is due by the severer. If it is sold, the tax is due by the severer; or by the purchaser, if for any reason it is not paid by the severer. If the natural resource is sold to the state or to the federal government, the tax is still due because the liability for the tax falls primarily on the severer and not on the purchaser. The tax is due on all natural resources removed from the state after severance and must be paid to the state of Louisiana. There is no provision of the law to exempt the parish, municipality, nor any board or agency of the state of Louisiana from the payment of this tax. However, the tax is not due or owed by a town, parish, or other political subdivision of the state which engages in severing sand or any other natural resource for its own use. Among the resources included are all forms of timber, pulpwood, and minerals such as sulphur, salt, coal, lignite, and ores; also marble, stone, sand, shells, and other natural deposits; and the salt content in brine.B. Reports and Payment of Tax1. By Severers a.i. Every person severing any natural resource from the soil or water of the state must file a report, on forms obtained from the Department of Revenue, on or before the last day of the month following the month during which the natural resource is severed. It is necessary that the report be filed in duplicate. The tax due shall become delinquent after the last day of the month in which the tax is due and payable. For example, the tax due for products severed in October will become delinquent on the first day of December if not paid on or before November 30.
ii. Delinquent reports and tax shall be subject to penalties, interest, and other additional costs. The report, together with payment for the tax due thereon, is required to be delivered (by mail or in person) to the cashier's division of the Department of Revenue showing the following information in the spaces provided therefor: (a). parish in which resource is severed and the month during which severed;(b). the name and address of the person or corporation making the report;(c). the product severed, the quantity and amount of tax;(d). all the information in the schedules on the reverse side of the report form, where applicable. b. In cases where there were no operations during the month, a report must be filed indicating "no operations." Each report must be signed by the reporting taxpayer or officer of the corporation under declaration that it is made under the penalties imposed for perjury.2. By Purchasers. On or before the last day of the month following the month to which the tax is applicable, purchasers and other persons dealing in any natural product severed from the soil or water in Louisiana shall deliver to the cashier's division of the Department of Revenue a monthly report on forms procured from the department. The report must be signed under the declaration that is made under the penalties imposed for perjury and must show on the reverse side the names and addresses of all persons from whom they have purchased any natural product during the month, together with the total quantity of each natural product. At the time of making the report, the purchaser or other dealer shall pay to the secretary the amount of tax deducted or withheld at the time of the purchase. If, for example, the seller had paid the severance tax, none would be due by the purchaser; however, the purchaser must file a monthly report showing the name and address of each person from whom the purchases were made, as well as the quantity and kind of product purchased.C. Types of Product and Tax Rates1. Timber. Severance tax must be paid on all trees and timber severed from the soil or water in Louisiana. Timber may be cut in Louisiana and transferred to another state to be made into lumber or other products, but the severance tax must be paid to the state of Louisiana regardless of the use after severance. In cases where the timber is cut by private interests in national forests, the usual practice is to scale and pay for the timber prior to cutting, and the purchaser or severer is thus liable for the severance tax. Whether the timber is scaled before or after cutting, the severance tax is collected from the purchasers on timber cut by them in national forests located in Louisiana. The rate, per ton, is established by applying the statutory tax rate to the average stumpage market value determined annually by the Louisiana Forestry Commission and the Louisiana Tax Commission. Because of the fluctuating market from year to year, it is necessary that the taxpayer use the proper report form applicable to the year for which his monthly report is being filed.2. Pulpwood. The severance tax must also be paid on all trees and timber classified as pulpwood, both hardwood and pine. The rate per ton is established by applying the statutory tax rate to the annual average market value as determined by the Louisiana Forestry Commission and the Louisiana Tax Commission. Like timber, the pulpwood severance tax must be reported on the proper form for the year in which the monthly report is filed.3. Sand a. Sand is a noncohesive granular material consisting of particles finer than 10 mesh, 2.00 mm, but coarser than 200 mesh, 0.074 mm in size. For taxable purposes, sand is divided into three categories: b. Sand contained in a sand-clay gravel mixture or pit-run gravel mixture is specifically excluded from those three categories and the provisions applicable thereto. In the case of materials which have been blended from two or more sources, the determination as to whether the blended materials constitute sand, as defined below, must be made separately on the basis of the materials severed from each source. The severance tax rate on sand is $0.06 per ton of 2,000 pounds. If production records as well as sales records are kept on a cubic-yard basis, it would be necessary to convert cubic yards to tons for the purpose of reporting and paying the severance tax. The official conversion factors are based on 2,700 pounds per cubic yard, and the factors for the three categories of sand are shown below. Cubic Yards to Tons Conversion Factor |
Washed Sand | 1.35 |
River Sand (8% by weight allowance included) | 1.24 |
Other Sand (8% by weight allowance included) | 1.24 |
Computation of tax: cubic yards x conversion factor = tax |
c. Washed Sand. In the case of washed sand, the entire weight will be considered to be taxable without any allowance for foreign substances.d. River Sand. River sand or fill material removed from the Mississippi River, or batture, or other rivers and bodies of water will be deemed to be taxable in the absence of the submission of written proof that more than 15 percent by weight of such material consists of foreign substances (silt and other foreign matter). An exclusion from the tax of 8 percent of the entire weight severed will be allowed for silt without the necessity of supporting such allowance with representative samples or other proof. However, an exclusion in excess of 8 percent by weight will not be allowed without submission of proof that the foreign substances contained in the material severed exceeds 8 percent by weight.e. Other Sand i. Other sand will be considered to be subject to tax if it constitutes 85 percent by weight or more of the materials extracted, as defined under sand above. An exclusion from the tax of 8 percent of the entire weight severed will be allowed for foreign substances without the necessity of supporting such allowance with representative samples or other proof. However, an exclusion in excess of 8 percent by weight will not be allowed without submission of proof that the foreign substances contained in the material severed exceeds 8 percent by weight.ii. It is the responsibility of the severer, purchaser, and user, to establish, to the satisfaction of the secretary, that soil on which the sand severance tax is not being paid does not constitute sand, as defined above. For this purpose, the secretary may require the submission of representative samples from each separate source and such other data as he may consider appropriate. It is also the responsibility of the severer, purchaser, and user to maintain adequate records as to the quantity, quality, and taxable status of such materials by source.4. Shells. The two principal kinds of shell are clam and reef or oyster. The shells shall be reasonably free from objectionable matter much as sticks, mud, clay lumps, or other foreign materials. Severance tax on shells shall be paid on actual weight including moisture and foreign matter up to, but not in excess of, 12 percent. The rate of tax is $0.06 per ton of 2,000 pounds. For the purpose of reporting and paying the severance tax, where the production and sales records are kept on a cubic-yard basis, it is necessary to utilize the conversion table shown below. Conversion Factor |
Shells (reef or oyster) 1500 lbs. per cu. yd. | 0.75 |
Shells (clam) 1750 lbs. per cu. yd. | 0.875 |
Computation of tax: cubic yards x conversion factor = tons x rate = tax |
5. Stone. Generally, crushed stone is recognized as consisting of clean, tough, sound, durable particles of stone. The severance tax rate on stone is $0.03 per ton of 2,000 pounds. Where production and sales records are kept on a cubic-yard basis, it is necessary to convert to tons for severance tax reporting and paying purposes. The conversion table is shown below. Conversion Factor |
Stone (crushed) 2700 lbs. per cu. yd. | 1.35 |
Computation of tax: Cubic yards x conversion factor = tons x rate = tax |
6. Marble. Generally, marble is defined as any limestone, granular to compact in texture, capable of taking polish or of being used for fine architectural work. Marble (proper) differs from common limestone in being more or less crystallized by metamorphism. The severance tax rate on marble is $0.20 per ton of 2,000 pounds.7. Minerals. There is a severance tax on the salt content in brine (commonly referred to as salt brine) extracted or produced in solution from the soil or water, when the same is used in the manufacture of other products and is not marketed as salt. The severance tax rates for the minerals in this Section are as follows. Sulphur | $1.03 per long ton of 2,240 pounds |
Salt | $0.06 per ton of 2,000 pounds |
Salt content in brine | $0.005 per ton of 2,000 pounds |
Coal | $0.10 per ton of 2,000 pounds |
Lignite | $0.12 per ton of 2,000 pounds |
Ores | $0.10 per ton of 2,000 pounds |
La. Admin. Code tit. 61, § I-2901
Adopted by the Department of Revenue and Taxation, Severance Tax Section, October 1970, promulgated LR 13:111 (February 1987), amended by the Department of Revenue, Severance Tax Division, LR 23:1704 (December 1997).AUTHORITY NOTE: Adopted in accordance with R.S. 47:631 and 633.