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Regular Session, 2010
HOUSE BILL NO. 845
BY REPRESENTATIVE NOWLIN
TAX/SALES-USE, LOCAL: Provides relative to requirements for private contracts with
agencies or firms for the collection of local sales and use tax.
AN ACT1
To amend and reenact R.S. 47:337.26(C) and (D)(1)(introductory paragraph) and (c) and to2
enact R.S. 47:337.26(D)(3), (F), and (G), relative to collection of local sales and use3
tax; to provide for requirements governing certain activities of private contractors;4
to prohibit the sharing of certain taxpayer information; to provide with respect to5
contracts; to provide for oversight by the legislative auditor; and to provide for6
related matters.7
Be it enacted by the Legislature of Louisiana:8
Section 1. R.S. 47:337.26(C) and (D)(1)(introductory paragraph) and (c) are hereby9
amended and reenacted and R.S. 47:337.26(D)(3), (F), and (G) are hereby enacted to read10
as follows: 11
§337.26. Contracts for purposes relating to collection of sales and use taxes12
* * *13
C.(1) Any private agency or auditing firm hired for the purposes of this14
Section and any employee , contractor, or other agent of such private agency or15
auditing firm shall be governed by the provisions of R.S. 47:1508 et seq.16
(2) Audit leads provided by the private agency or auditing firm shall be17
subject to the taxpayer confidentiality requirements of R.S. 47:1508 et seq.18
Following the commencement of an examination or audit with respect to a taxpayer,19
the provision of audit leads by such private agency or auditing firm to other local20 HLS 10RS-1211 ORIGINAL
HB NO. 845
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collectors are strictly prohibited under the taxpayer confidentiality requirements of1
R.S. 47:1508 et seq.2
(3) Notwithstanding any provision of this Section to the contrary, a private3
agency or auditing firm shall limit its activities to auditing the books and records of4
the taxpayer and shall not perform any assessment or collection functions which by5
law are required to be performed by the local collector.6
(4) Each employee, contractor, or other agent performing an examination or7
audit function on behalf of the private agency or auditing firm shall have a lead8
auditor who possesses an active certified public accountant license, a bachelor of9
science degree with a minimum of eighteen hours in accounting, or a certified tax10
examiner's certificate issued by the Louisiana Association of Tax Administrators.11
D.(1) Prior to initiating an examination or audit of a taxpayer, a taxing12
authority the local collector shall provide notice of the taxing authority's the intent13
to audit which shall be sent by certified mail to the taxpayer at the taxpayer's last14
known address. Such notice shall:15
* * *16
(c)(i) Advise the taxpayer of the right to review and copy the audit contract17
if the audit will be conducted by a private auditing firm.18
(ii) If the audit is conducted by a private auditing firm, the notice shall also19
advise the taxpayer whether the payment of compensation to the private auditing20
firm is contingent upon the actual collection of tax or in any other way dependent on21
the outcome of the audit.22
* * *23
(3) Upon completion of the audit or examination, all information obtained24
by the private agency or auditing firm from the taxpayer in connection with the audit25
or examination, whether written or in electronic form, shall be returned to the26
taxpayer, and the private agency or auditing firm shall not retain any copies of such27
information. All taxpayer related information derived, compiled, or generated by the28 HLS 10RS-1211 ORIGINAL
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private agency or auditing firm in any form whatsoever, including audit schedules1
and working papers, shall be delivered to the tax collector.2
* * *3
F. Each contract entered into pursuant to this Section shall be subject to4
review and oversight by the legislative auditor pursuant to R.S. 33:1427 and shall5
contain a statement by the local collector and private agency or auditing firm6
certifying that the terms and conditions of the contract are in compliance with the7
requirements of the provisions of this Section. Any contract that does not satisfy the8
requirements of this Section shall be null and void. 9
G. The private agency or auditing firm hired for the purposes of this Section,10
including any employee, contractor, or other agent of such private agency or auditing11
firm conducting such examination or audit, shall be subject to the Code of12
Governmental Ethics.13
Section 2. The provisions of this Act shall apply to audits or examinations conducted14
after the effective date of this Act.15
Section 3. This Act shall become effective upon signature by the governor or, if not16
signed by the governor, upon expiration of the time for bills to become law without signature17
by the governor, as provided by Article III, Section 18 of the Constitution of Louisiana. If18
vetoed by the governor and subsequently approved by the legislature, this Act shall become19
effective on the day following such approval.20
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. 845
Abstract: Requirements for private contracts for audit activities related to the collection of
local sales and use tax, including taxpayer privacy protection, limitations on
contractor activities, and specific provisions for contracts.
Present law authorizes any taxing authority to contract for the examination or investigation
of businesses, tangible personal property, books, etc., of any taxpayer for purposes of
enforcement and collection of any tax imposed by the taxing authority. HLS 10RS-1211 ORIGINAL
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Present law requires the taxing authority to notify a taxpayer of an impending audit and
provide information relating to the purpose of the audit, taxpayer rights, and identification
of the entity conducting the audit.
Proposed law retains present law and adds additional requirements for contracts with private
agencies or audit firms which include: limitations on the sharing of audit leads with other
tax collectors, limitations related to the confidentiality of taxpayer records, credentials
required for auditors, disclosure of how the private agency or audit firm will be paid for its
services.
Proposed law shall be applicable to audits commenced after the effective date of this Act.
Effective upon signature of governor or lapse of time for gubernatorial action.
(Amends R.S. 47:337.26(C), (D)(1)(intro. para.) and (c); Adds R.S. 337.26(D)(3), (F), and
(G))