Louisiana Revised Statutes Tit. 47, § 305.4. Exemptions; raw materials for further processing

(1)(a) The raw materials become a recognizable and identifiable component of the end product.

(b) The raw materials are beneficial to the end product.

(c) The raw materials are material for further processing, and as such, are purchased for the purpose of inclusion into the end product.

(2)(a) If the materials are further processed into a byproduct for sale, the purchases of materials shall not be deemed to be sales for further processing and shall be taxable. For purposes of this Paragraph, the term “byproduct” shall mean any incidental product that is sold for a sales price less than the cost of the materials.

(b) In the event a byproduct is sold at retail in this state for which a sales and use tax has been paid by the seller on the cost of the materials, which materials are used partially or fully in the manufacturing of the byproduct, a credit against the tax paid by the seller shall be allowed in an amount equal to the sales tax collected and remitted by the seller on the taxable retail sale of the byproduct.