§301.5. Bundled transactions

            A. Bundled transactions. Except as otherwise provided for in this Section or federal law, sales tax shall be collected on the sales price of a bundled transaction if any product included in the bundled transaction would be taxable if sold separately.

            B. Definitions. For purposes of this Section, the following terms shall have the following meanings:

            (1)(a) "Bundled transaction" shall mean the retail sale of two or more products where the products are otherwise distinct and identifiable and the products are sold for one non-itemized price. In order to show whether a retail sale consisted of one or more distinct and identifiable products and whether the products were sold for one non-itemized price, a seller shall maintain copies of invoices, service agreements, contracts, catalogs, price lists, rate cards, and other sales-related documents given to, or made available to, the purchaser.

            (b) "Bundled transaction" shall not include either of the following:

            (i) The sale of any products in which the sales price varies or is negotiable based on the selection by the purchaser of the products included in the transaction.

            (ii) Any of the exceptions provided for in Subsection C of this Section.

            (2) "Distinct and identifiable products" do not include any of the following:

            (a) Packaging such as containers, boxes, sacks, bags and bottles, or other materials such as wrapping, labels, tags and instruction guides that accompany the retail sale of the products and are incidental or immaterial to the retail sale thereof. Examples of packaging that are incidental or immaterial include but are not limited to grocery sacks, shoeboxes, dry cleaning garment bags, and express delivery envelopes and boxes.

            (b) A product provided free of charge with the required purchase of another product. A product is provided free of charge if the sales price of the product purchased does not vary depending on the inclusion of the product provided free of charge.

            (c) Items included in the definition of sales price pursuant to R.S. 47:301(13).

            (3) "One non-itemized price" does not include a price that is separately identified by product on binding sales or other supporting sales-related documentation made available to the customer in paper or electronic form including but not limited to an invoice, bill of sale, receipt, contract, service agreement, lease agreement, periodic notice of rates and services, rate card or price list.

            (4) "Products" mean and include tangible personal property, services, intangibles, and digital products but shall not include immovable property.

            C. Exceptions. A transaction that otherwise meets the definition of bundled transaction is not considered a bundled transaction if it meets any of the following:

            (1)(a) True object exception. The true object exception applies to either of the following transactions:

            (i) The retail sale of tangible personal property or a digital product and a service where the true object of the transaction is the service and the tangible personal property or digital product is essential to the use of the service, and is provided exclusively in connection with the service. If the transaction is not a bundled transaction as a result of this exception, then the true object of the transaction will be the retail sale of the service and should be taxed accordingly.

            (ii) The retail sale of multiple services where one service is essential to the use or receipt of a second service and the first service is provided exclusively in connection with the second service, and the true object of the transaction is the second nontaxable service. If the transaction is not a bundled transaction as a result of this exception, then the true object of the transaction will be the retail sale of the second service and should be taxed accordingly.

            (b) For purposes of this Paragraph, factors that should be considered to determine the true object of a transaction include the seller's line of business; the purchaser's object of the transaction; whether the tangible personal property or service that is essential to the second service is available for sale separately without the second service; and how the tangible personal property or service is essential to the second service.

            (c) The true object exception applies only to transactions that include a service and shall not apply to transactions that include only tangible personal property or digital products.

            (d) When the true object of the transaction is a nontaxable service, the service provider shall be considered the consumer of any taxable products provided to the customer as part of the transaction.

            (2)(a) De minimis exception. The de minimis exception applies to a transaction that includes taxable products and nontaxable products and the sales price of the taxable products is de minimis. Sellers shall use the full term of a service contract to determine if the taxable products are de minimis.

            (b) As used in this Paragraph, de minimis means the sales price of the taxable products is ten percent or less of the total sales price of the bundled products.

            (3) Food, drugs and medical items exception. The food, drugs, and medical items exception applies to the retail sale of exempt tangible personal property and taxable tangible personal property where the transaction includes food and food ingredients, drugs, durable medical equipment, mobility enhancing equipment, over-the-counter drugs, prosthetic devices or medical supplies and the sales price of the taxable tangible personal property is fifty percent or less of the total sales price of the bundled products.

            D.(1) Notwithstanding Subsections B and C of this Section, if a bundled transaction includes the sale of a digital code that provides a purchaser with the right to obtain more than one digital product, and which may also include the right to obtain other products or services, and all of the products and services, digital or otherwise, to be obtained through the use of the code do not have the same sales and use tax treatment, both of the following shall apply:

            (a) The transaction shall be deemed to be the sale of the products and services to be obtained through the use of the code.

            (b) The sales and use tax applies to the entire selling price of the code, except as provided in Paragraph (2) of this Subsection.

            (2) If the seller can identify by reasonable and verifiable standards the portion of the selling price attributable to the products and services that are not subject to state sales and use tax from its books and records that are kept in the regular course of business for other purposes including but not limited to nontax purposes, sales and use tax does not apply to that portion of the selling price of the code attributable to the products and services that are not subject to sales and use tax.

            E. The secretary of the Department of Revenue may promulgate rules in accordance with the Administrative Procedure Act as are necessary to implement the provisions of this Section.

            Acts 2024, 3rd Ex. Sess., No. 11, §2, eff. Dec. 4, 2024.

            NOTE: See Acts 2024, 3rd Ex. Sess., No. 10, §5, which provides that in case of conflict between Acts 10 and 11, Act 11 controls.