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Regular Session, 2010
HOUSE BILL NO. 666
BY REPRESENTATIVE NOWLIN
TAX/SALES-USE, LOCAL: Authorizes the prevailing party in certain collection actions
to recover attorney fees and costs under certain circumstances
AN ACT1
To amend and reenact R.S. 47:337.13.1, relative to tax collection; to provide relative to the2
authority of local collectors to employ private counsel; to authorize the recovery of3
attorney fees under certain circumstances; to provide for certain limitations; to4
provide for an effective date; and to provide for related matters.5
Be it enacted by the Legislature of Louisiana:6
Section 1. R.S. 47:337.13.1 is hereby amended and reenacted to read as follows: 7
ยง337.13.1. Power to employ counsel; attorney fees8
A.(1) The local collector is authorized to employ private counsel to assist in9
the collection of any taxes, penalties, or interest due under this Subtitle, or to10
represent him in any dispute, contest, or other controversy involving the11
determination of sales and use tax due, or in any other proceeding under this Subtitle.12
The attorney fees and legal expenses incurred by the local collector for the13
employment of private counsel shall be reimbursed to him by the local taxing14
authorities and recoverable as a deduction from current collections, unless such15
attorney fees and legal expenses are recoverable as a reimbursement from the16
taxpayer.17
(2) If any taxes, penalties, or interest due and final under this Subtitle are18
referred to an attorney at law for a collection action, an additional charge for attorney19
fees, in the amount of ten percent of the taxes, penalties, and interest due, except20
with respect to amounts timely paid under protest with a return that is not delinquent,21
or paid under protest to a vendor in accordance with law, shall be paid by the22 HLS 10RS-1207 ENGROSSED
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taxpayer to the local collector; provided, however, that the amount paid to the1
attorney for attorney fees shall be subject to the discretion of the court as to2
reasonableness.3
(3) A taxpayer shall not be subject to the payment of attorney fees unless the4
local collector is the prevailing party entitled to reimbursement of attorney fees and5
costs as provided for in Subsection B of this Section.6
B.(1) Except as otherwise provided for in Paragraph (3) of Subsection A of7
this Section, the prevailing party in a dispute, contest, or other controversy involving8
the determination of sales and use tax due shall be entitled to reimbursement of9
attorney fees and costs, not to exceed ten percent of the taxes, penalties, and interest10
at issue, unless the position of the non-prevailing party is substantially justified. The11
prevailing party is defined as the party which has substantially prevailed with respect12
to the amount in controversy or substantially prevailed with respect to the most13
significant issue or set of issues presented. A position is substantially justified if it14
has a reasonable basis in law and fact. The reimbursement amount for attorney fees15
and costs shall be subject to the discretion of the court as to reasonableness.16
(2) The provisions of this Subsection shall not apply to amounts timely paid17
under protest by the taxpayer with a return that is not delinquent, or paid under18
protest to a vendor in accordance with law, as provided for in Subsection A of this19
Section.20
(3) A local collector, which is a non-prevailing party in a collection action,21
assessment appeal, or an action to recover amounts paid under protest, shall be22
reimbursed by the local taxing authorities for attorney fees and costs incurred by the23
tax collector and recoverable as a deduction from current collections.24
(4) The provisions of this Section shall only apply to matters referred to25
private counsel by the local collector.26
C. A local collector may waive the attorney fee award as provided for in this27
Section. A waiver of attorney fees by a local collector shall be considered timely if28
the notice of the waiver is mailed to a taxpayer by certified mail, return receipt29 HLS 10RS-1207 ENGROSSED
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requested, within fifteen days of the filing of a suit. If a local collector timely waives1
its attorney fee award, a taxpayer may not recover attorney fees as provided for in2
Subsection B of this Section.3
Section 2. This Act shall become effective upon signature by the governor or, if not4
signed by the governor, upon expiration of the time for bills to become law without signature5
by the governor, as provided by Article III, Section 18 of the Constitution of Louisiana. If6
vetoed by the governor and subsequently approved by the legislature, this Act shall become7
effective on the day following such approval.8
DIGEST
The digest printed below was prepared by House Legislative Services. It constitutes no part
of the legislative instrument. The keyword, one-liner, abstract, and digest do not constitute
part of the law or proof or indicia of legislative intent. [R.S. 1:13(B) and 24:177(E)]
Nowlin HB No. 666
Abstract: Authorizes the prevailing party in certain collection actions to recover attorney
fees and costs under certain circumstances.
Present law authorizes a local collector to employ private counsel to assist in the collection
of taxes, penalties, or interest due under present law, or to represent him in any proceeding.
If taxes, penalties, or interest due are referred to an attorney for collection, an additional
charge for attorney fees, in the amount of 10% of the taxes, penalties, and interest due shall
be paid by the taxpayer. Present law makes an exception for amounts timely paid under
protest with a return that is not delinquent or paid under protest to a vendor.
Proposed law changes present law by adding authorization for a local collector to employ
private counsel in any dispute, contest, or other controversy involving the determination of
sales and use tax due.
Proposed law further requires that attorney fees and legal expenses incurred by a local
collector for the employment of private counsel be reimbursed to the local collector by the
local taxing authorities and recoverable as a deduction from current collections, unless such
attorney fees and legal expenses are recoverable as a reimbursement from the taxpayer.
Proposed law provides that a taxpayer shall not be subject to the payment of attorney fees
unless the local collector is the prevailing party entitled to reimbursement of attorney fees
and costs. Further provides that the reimbursement of attorney fees and costs shall not
exceed 10% of the taxes, penalties, and interest at issue, unless the position of the non-
prevailing party is substantially justified. Proposed law defines "prevailing party". A
position is substantially justified if it has a reasonable basis in law and fact. The
reimbursement amount for attorney fees and costs shall be subject to the discretion of the
court as to reasonableness.
Proposed law provides that the provisions of proposed law shall not apply to amounts timely
paid under protest by the taxpayer with a return that is not delinquent or paid under protest
to a vendor in accordance with law. HLS 10RS-1207 ENGROSSED
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Proposed law provides that a local collector, which is a non-prevailing party in a collection
action, assessment appeal, or an action to recover amounts paid under protest, shall be
reimbursed by the local taxing authorities for attorney fees and costs incurred by the tax
collector and recoverable as a deduction from current collections.
Proposed law provides that the provisions of proposed law shall only apply to matters
referred to private counsel by the local collector.
Proposed law provides that a local collector may waive the attorney fee award and shall be
considered timely if the notice of the waiver is mailed to a taxpayer by certified mail, return
receipt requested, within 15 days of the filing of a suit. If a local collector timely waives its
attorney fee award, a taxpayer may not recover attorney fees.
Effective upon signature of governor or lapse of time for gubernatorial action.
(Amends R.S. 47:337.13.1)
Summary of Amendments Adopted by House
Committee Amendments Proposed by House Committee on Ways and Means to the
original bill.
1. Added authorization for a local collector to employ private counsel in any
dispute, contest, or other controversy involving the determination of sales and
use tax due.
2. Changed the bill from one which authorizes a taxpayer who successfully defends
a collection action to recover attorney fees and costs to one which authorizes the
prevailing party in a collection action to be entitled to the reimbursement of
attorney fees and costs.
3. Added definitions for "prevailing party".
4. Added requirement that attorney fees and legal expenses incurred by a local
collector for the employment of private counsel be reimbursed to the local
collector by the local taxing authorities and recoverable as a deduction from
current collections, unless such attorney fees and legal expenses are recoverable
as a reimbursement from the taxpayer.