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Regular Session, 2010
HOUSE BILL NO. 667
BY REPRESENTATIVE NOWLIN
TAX/SALES & USE: Authorizes a taxpayer to recover costs related to arbitrary tax
assessments
AN ACT1
To enact R.S. 47:337.28.1, relative to collection of local sales and use tax; to prohibit certain2
arbitrary assessments by tax collectors; to define arbitrary assessment; to authorize3
the recovery of litigation costs under certain circumstances; and to provide for4
related matters.5
Be it enacted by the Legislature of Louisiana:6
Section 1. R.S. 47:337.28.1 is hereby enacted to read as follows:7
ยง337.28.1 Arbitrary assessments prohibited8
A. Notwithstanding any provision of this Chapter to the contrary, the9
collector shall be prohibited from issuing an arbitrary assessment. For purposes of10
this Chapter, the term "arbitrary assessment" shall mean an estimated assessment11
issued by the local collector which does not comply with R.S. 47:337.28, 337.48(A)12
or 337.53. The taxpayer shall bear the burden of proving that the assessment was not13
in compliance with the law.14
B. If the assessment by the collector is determined by a court of competent15
jurisdiction to be an arbitrary assessment, the assessment shall neither interrupt nor16
suspend prescription, and the dealer shall be reimbursed by the collector for17
reasonable costs of litigation. The amount of costs recoverable under this Section18
shall not exceed ten percent of the taxes, interest, and penalty that were arbitrarily19 HLS 10RS-1210 REENGROSSED
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assessed, which amount shall be subject to the discretion of the court as to1
reasonableness.2
C. No assessment shall be made under this Chapter for the purpose of3
depriving a taxpayer of his constitutional right to a three-year prescriptive period for4
the assessment of tax in accordance with Article VII, Section 16 of the Constitution5
of Louisiana.6
Section 2. This Act shall become effective upon signature by the governor or, if not7
signed by the governor, upon expiration of the time for bills to become law without signature8
by the governor, as provided by Article III, Section 18 of the Constitution of Louisiana. If9
vetoed by the governor and subsequently approved by the legislature, this Act shall become10
effective on the day following such approval.11
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. 667
Abstract: To prohibit arbitrary assessments by tax collectors and to authorize the recovery
of litigation costs by taxpayers under certain circumstances.
Present law authorizes a local collector to estimate the retail sales of a dealer who fails to
report or pay taxes, or who files a fraudulent or false report. Further requires the collector
to assess and collect the tax plus any interest and penalty that may have accrued thereon.
The assessment shall be considered prima facie correct, and the burden to show the contrary
rests with the dealer.
Proposed law retains present law and adds a prohibition on the issuance of arbitrary
assessments by local collectors, which are assessments not in compliance with provisions
of present law regarding tax assessments. The taxpayer shall have the burden of proving that
an assessment is arbitrary. Further, provides that if a taxpayer is issued an arbitrary
assessment, the assessment shall neither interrupt nor suspend prescription and the collector
shall reimburse the taxpayer for reasonable costs of litigation. The amount of costs shall not
exceed 10% of the taxes, interest, and penalties at issue and shall be subject to the discretion
of the court as to reasonableness.
Proposed law provides that the determination of whether or not an assessment is arbitrary
shall be made by a court of competent jurisdiction.
Effective upon signature of governor or lapse of time for gubernatorial action.
(Adds R.S. 47:337.28.1) HLS 10RS-1210 REENGROSSED
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Summary of Amendments Adopted by House
Committee Amendments Proposed by House Committee on Ways and Means to the
original bill.
1. Deleted provisions regarding the estimation of tax due by a collector in instances
where the dealer fails to report or makes a grossly incorrect report.
2. Deleted provisions of proposed law which would have defined "arbitrary
assessment". Instead provides that an "arbitrary assessment" shall be one which
does not comply with present law.
3. Deleted provisions of proposed law providing for recovery of reasonable costs
by a dealer in the event a collector issues a grossly incorrect assessment.
House Floor Amendments to the engrossed bill.
1. Specified that the determination of whether or not an assessment is "arbitrary"
shall be made by a court of competent jurisdiction.