During the recent 2013 Regular Session, the Louisiana Legislature passed a sweeping tax amnesty bill (House Bill 456). The bill provides amnesty for virtually all Louisiana state taxes and will be available to taxpayers through a series of specified amnesty periods in 2013, 2014, and 2015, with benefits decreasing in each of the amnesty periods. In 2013, the Secretary of the Department of Revenue (the “Secretary” or the “Department”) will waive one-half (50%) of the interest and all of the penalties for the relevant tax periods. In 2014, the Secretary will waive only fifteen percent (15%) of penalties, but no interest. And, in 2015, the Secretary will waive ten percent (10%) of penalties, but no interest.
The specific dates of the amnesty periods are yet to be determined by the Secretary, but they must fall within the following timeframes:
- 2013: 2 months prior to December 31, 2013
- 2014: 1 month between July and December, 2014
- 2015: 1 month between July and December, 2015
The tax amnesty applies to (1) all taxes administered by the Department, except for motor fuel taxes and penalties for failure to submit information reports that are not based on an underpayment of tax; (2) taxes due prior to January 1, 2013, for which the Department has issued an individual or a business proposed assessment, notice of assessment, bill, notice, or demand for payment not later than May 31, 2013; (3) taxes for taxable periods that began before January 1, 2013; and (4) taxes for which the taxpayer and the Department have entered into an agreement to interrupt the running of prescription through December 31, 2013.
In order to claim amnesty, the participating taxpayer must agree that its right to protest or initiate an administrative or judicial proceeding regarding taxes for any of these time periods is barred. Taxpayers involved in field audits or litigation must agree to abide by the Department’s interpretation of the law regarding the issues resolved by amnesty for three years. Failure to abide by the Department’s interpretation subjects taxpayers to a negligence penalty. The amnesty application for taxpayers involved in field audits or litigation must include all issues and all eligible periods involved in the audit or litigation. And, the Secretary reserves the right to require taxpayers to file tax returns with the amnesty application. Taxpayers with existing liens on their property, as well as taxpayers against whom the Department has initiated proceedings under the assessment and distraint procedure are eligible for amnesty. However, such taxpayers are required to pay all liens for the relevant tax periods. Finally, taxpayers who have paid taxes under protest and filed suit must agree that, upon approval of their amnesty application, the Department can release the payment from escrow. No interest will be paid on any refunds of amounts previously collected by the Department.
Taxpayers will be required to apply for amnesty, which must be approved by the Secretary. All of the tax, fees and costs, if applicable, and any interest due must be paid with the submission of the amnesty application. Over the next several months, the Secretary will promulgate regulations to administer and implement the amnesty program, including the amnesty application.
House Bill 456 was signed by Governor Bobby Jindal on June 21, 2013 and is designated as Act 421.