SLS 162ES-12 REENGROSSED
2016 Second Extraordinary Session
SENATE BILL NO. 2
BY SENATORS MORRELL AND THOMPSON
TAX/TAXATION. Provides for interest paid on refunds of tax overpayments. (Item No. 45)
(7/1/16)
1 AN ACT
2 To amend and reenact R.S. 47:115(A)(3) and (C) and 1624 and to repeal R.S. 47:287.657,
3 617, and 1624.1, relative to interest on refunds of tax overpayments; to provide
4 relative to netting of corporate income and franchise tax for purposes of interest
5 computation; to provide relative to interest on certain severance tax overpayments;
6 and to provide for related matters.
7 Be it enacted by the Legislature of Louisiana:
8 Section 1. R.S. 47:115(A)(3) and (C) and 1624 are hereby amended and reenacted
9 to read as follows:
10 §115. Refunds and credits
11 A. Employee refunds and credits.
12 * * *
13 (3) To the extent that the aforesaid credit for withholding provided in
14 Subsection A of this Section, together with other credits allowed by law, is in
15 excess of the employee's income tax liability for said the taxable year, as shown on
16 an income tax return filed by such the employee for that year, such the overpayment
17 shall be considered as taxes erroneously paid to be credited or refunded as herein
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Coding: Words which are struck through are deletions from existing law;
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SLS 162ES-12 REENGROSSED
1 provided in this Subsection. Such The overpayment shall be credited to such the
2 person's estimated or income tax liability for the succeeding taxable year unless such
3 the person shall claim a refund therefor except that overpayment of one dollar or less
4 shall be refunded or credited only upon the receipt by the secretary of a written
5 demand for such the refund from the taxpayer; however, the collector is authorized
6 to consider any final return showing an overpayment as a claim for refund. An
7 overpayment shall bear no interest if credit is given therefor; amounts refunded as
8 overpayments shall bear interest at the rate established pursuant to R.S. 13:4202 per
9 year computed from ninety days after the filing date of the final return showing the
10 overpayment, or from the due date of such final return, whichever is later.
11 * * *
12 C. Other refunds and credits. To the extent a taxpayer's payments, together
13 with other credits allowed by law, is in excess of his income tax liability shown on
14 a return filed for the taxable year, such the overpayment shall be considered as taxes
15 erroneously paid to be credited or refunded as herein provided. Such The
16 overpayment shall be credited to the taxpayer's estimated or income tax liability for
17 the succeeding taxable year unless a claim for refund is made. Notwithstanding any
18 provision of this Subsection to the contrary, an overpayment of one dollar or less
19 shall be refunded or credited only upon the receipt by the secretary of a written
20 demand for such the refund from the taxpayer. The secretary is authorized to
21 consider any final return showing an overpayment as a claim for refund. An
22 overpayment shall bear no interest if credit is given. Amounts refunded as
23 overpayments shall bear interest at the rate established pursuant to R.S. 13:4202
24 computed from ninety days after the filing date of the final return showing the
25 overpayment or from the due date of the final return, whichever is later. No interest
26 on refunds shall be allowed if, the secretary proves by clear and convincing evidence
27 that a person has deliberately overpaid a tax in order to derive the benefit of the
28 interest allowed by this Section. Payments of interest authorized by this Section shall
29 be made from funds derived from current collections of the tax to be refunded.
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SLS 162ES-12 REENGROSSED
1 * * *
2 §1624. Interest on refunds or credits
3 A. (1) Notwithstanding Except as provided in Paragraph (2) of this
4 Subsection, notwithstanding any other provision of law to the contrary, on all
5 refunds or credits of overpayments the secretary shall compute and allow as part of
6 the refund or credit, interest at the annual rate established in R.S. 13:4202 from the
7 date the return was due, the date the first return for that tax period was filed, or the
8 date the tax was paid, whichever is later ninety days after the later of the due date
9 of the return, the filing date of the return or claim for refund on which the
10 overpayment is claimed, or the date the tax was paid. An overpayment shall bear
11 no interest if it is credited to the taxpayer's account. No interest on refunds or credits
12 shall be allowed if, the secretary proves by clear and convincing evidence that a
13 person has deliberately overpaid a tax in order to derive the benefit of the interest
14 allowed by this Section. Payments of interest authorized by this Section shall be
15 made from funds derived from current collections of the tax to be refunded or
16 credited.
17 (2) Notwithstanding any provision of this Section, or any other provision
18 of law to the contrary, interest on a refund of an overpayment of severance tax
19 to an operator whose well qualifies for the severance tax suspension pursuant
20 to R.S. 47:633(7)(c)(iii) or (9)(d)(v) for new horizontal or deep wells shall be
21 paid as follows:
22 (a) For refunds issued on or before the one hundred eightieth day after
23 a properly filed claim for refund or an amended return for the new horizontal
24 or deep well has been submitted to the department with all supporting
25 documentation, interest shall be the rate for the year ascertained by the
26 department, which shall be the U.S. Treasury Yield Curve Constant Maturity
27 6-Month Treasury rate on the first business day of October of the preceding
28 year and published on or before the following January first.
29 (b) Interest on refunds made pursuant to this Subsection that are made
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SLS 162ES-12 REENGROSSED
1 after the one hundred eightieth day after a properly filed claim for refund or an
2 amended return has been submitted to the department shall be the interest rate
3 provided for in Subparagraph (a) of this Paragraph for the first one hundred
4 eighty days and at the rate established in R.S. 13:4202 for any period of time in
5 excess of one hundred eighty days in accordance with the provisions of
6 Subsection A of this Section.
7 B. As of the date a person files a petition for relief under the uniform
8 bankruptcy laws of the United States as provided in Title 11 USC 101 11 U.S.C. 101
9 et seq., no interest shall be allowed to accrue as a part of any refund or credit which
10 overpayment that relates to a pre-petition tax period. A person filing a petition for
11 relief prior to June 17, 1988, shall be entitled to the accrual of interest prior to the
12 effective date of this Subsection.
13 C. The provisions of this Section shall govern the calculation of interest
14 on all refunds resulting from the collection of any tax or administration of any
15 provision by or on behalf of the secretary of the Department of Revenue
16 pursuant to any provision contained in Title 26, Title 47, or Title 51 or
17 elsewhere in the Louisiana Revised Statutes of 1950, as amended, provided,
18 however, that the provisions of this Section shall not be applicable to the
19 calculation of interest on refunds issued pursuant to the International Fuel Tax
20 Agreement.
21 D. The secretary may offset any overpayments of estimated corporate
22 income tax or corporate franchise tax against the corporation's income tax or
23 franchise tax for the purpose of determining the interest due pursuant to the
24 provisions of R.S. 47:1601 and any interest payable pursuant to the provisions
25 of this Section.
26 E. No refund of franchise tax shall be paid by the secretary until any
27 claims of offset filed by the office of unemployment insurance administration
28 of the Louisiana Workforce Commission against the taxpayer under R.S.
29 23:1733 have been satisfied.
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SLS 162ES-12 REENGROSSED
1 Section 2. R.S. 47:287.657, 617, and 1624.1 are hereby repealed.
2 Section 3. The provisions of this Act shall apply to any refunds claimed on or after
3 July 1, 2016, notwithstanding the tax period to which the refund claim relates.
4 Section 4. The provisions of this Act shall become effective July 1, 2016.
The original instrument was prepared by Leonore F. Heavey. The following
digest, which does not constitute a part of the legislative instrument, was
prepared by J. W. Wiley.
DIGEST
SB 2 Reengrossed 2016 Second Extraordinary Session Morrell
Present law provides for the payment of interest on refunds of tax overpayments at the
judicial rate of interest.
Present law provides that refund interest begins to accrue immediately on the later of the
filing date of the return or due date of the return for all taxes other than individual income
tax.
Present law provides that individual income tax refund interest does not begin to accrue until
90 days after the later of the filing date of the return or due date of the return.
Present law provides a reduced interest rate for the first 180 days after receipt of the refund
claim for refunds of overpayments of severance tax to an operator whose well qualifies for
the severance tax suspension for new horizontal or deep wells.
Proposed law changes the refund interest accrual date to 90 days after the later of the filing
date of the return or claim for refund, or due date of the return for all taxes, but retains the
180 day reduced interest rate for severance tax refunds associated with new horizontal or
deep wells.
Present law allows netting of corporate income and corporate franchise tax for purposes of
interest calculation.
Proposed law retains present law and consolidates tax refund interest provisions into one
section of law.
Effective July 1, 2016.
(Amends R.S. 47:115(A)(3) and (C) and 1624; repeals R.S. 47:287.657, 617, and 1624.1)
Summary of Amendments Adopted by Senate
Senate Floor Amendments to engrossed bill
1. Makes technical changes.
2. Adds the filing date of the claim for refund to the 90 day refund interest
accrual date provision.
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Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions.