Form R-1022 - Application For Offshore Registration Number 1998 Page 2
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2R-1022 (7/98)
Information for Application for Offshore Registration Number
Act 631 of the 1985 regular session of the legislature amended and reenacted Louisiana Revised
Statute 47:305.10 to allow for tax-free purchases or importations of property for first use in the
offshore area of Louisiana or any other state, even if the specific location of first use is not known
at the time of purchase. Certain restrictions and requirements, however, are imposed on the
purchaser or importer of such tax-free goods, under the provisions of the act.
The purchaser must first request and obtain from the Secretary of Revenue, an “Offshore
Registration Number.” The request must be made in writing on forms supplied by the Secretary
and must provide all information required. If approved, the applicant will be issued a new sales
tax registration certificate with the proper “offshore” designation thereon. Applicants who do not
now have a sales tax registration certificate must also submit Form R-16019, (CR-1), Application
for Louisiana Tax Number, along with the offshore number request.
The offshore registration number will only be issued to applicants who consume tangible personal
property in the offshore area on a regular basis, and have a definite need for the privilege of
purchasing tax free for offshore use.
The most rigid requirement for obtaining and keeping the “Offshore Registration Number” status
is the record keeping requirement. Records must be maintained and kept to reflect accurately
the location of ultimate use of property which is purchased tax free. They must be easily accessible
and readily available for examination by the Department.
The exemption provided under the provisions of R.S. 47:305.10(C) applies only to tangible personal
property purchased for use in the offshore area. It does not apply to purchases for which the
location of use is known to be within the taxing jurisdiction of Louisiana or another state or
country. Property purchased tax free under this exemption must be accounted for by separate
inventory records to prevent the withdrawal of tax-free goods from the commingled inventory for
use in taxable areas. Fungible goods, due to their “continuous consumption” nature, may be
purchased tax free for use in both taxable and nontaxable locations. The proper accrual entries
must then be made each reporting period to record the taxes due for the portion that is determined
to have been consumed within the taxing jurisdiction of Louisiana or any other state. Purchases
of tangible personal property for use offshore in specifically known locations must be made through
the issuance of exemption certificate Form R-1096, (LGST-9D), Resale Certificate (Foreign
Purchaser).
Withdrawals from the nontaxpaid offshore inventory that are destined to any of the following uses
will be subject to taxation:
(1) withdrawals for use within the territorial jurisdiction of either Louisiana, or any other state,
or any foreign country.
(2) withdrawals for resale, exchange, trade, or barter.
Tangible personal property purchased tax free under this Act may be stored indefinitely, until
such time that it is needed at a particular location. Property may also be returned to the offshore
inventory following use in the offshore area, provided that use does not occur within Louisiana or
another state during its return to inventory. Property may also be returned to Louisiana or another
state for repairs, modification or refabrication without incurring any use tax liability. The repair
charges, however, will be subject to the sales tax.
An offshore registration number may be revoked by the Department for misuse, failure to retain
adequate accounting records, or failure to accrue and remit the taxes that become due on taxable
uses of withdrawn property. Upon such revocation, use tax will be immediately due on all property
remaining in the offshore inventory in addition to any other tax deficiencies that an examination
may reveal. It will then be the burden of the purchaser to prove to the satisfaction of the Department
that the deficiencies which led to the misuse, lack of documents, or failure to remit, have been
corrected and that the offshore registration number privilege should be restored.
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