Authorizes the secretary of the Department of Revenue to refuse to register or issue or may revoke a state sales tax resale certificate to new business if the business reorganization was intended to evade payment of sales and use or withholding tax. (7/1/18) (EN SEE FISC NOTE SG RV See Note)
Impact
With the enactment of SB239, businesses attempting to evade taxes through reorganization processes will face more stringent scrutiny. This law allows the Louisiana Department of Revenue the authority to ensure that any new business entities formed from reorganizations that have a history of tax evasion cannot easily circumvent their tax obligations. It holds business owners accountable by imposing a penalty of $5,000 in addition to any other taxes owed, thereby strengthening the state’s ability to collect due taxes and protect its revenue base.
Summary
Senate Bill 239 (SB239), enacted in Louisiana, aims to tighten tax administration by allowing the Department of Revenue to refuse the registration of a business or revoke an existing sales tax resale certificate if the business has undergone reorganization intended to evade tax obligations. This legislation specifically targets businesses that have collected but not remitted sales and use taxes or withholding taxes. The bill was introduced to prevent tax evasion strategies that exploit business reorganization to avoid tax liabilities and make sure that the tax system is upheld fairly and uniformly across all businesses operating within the state.
Sentiment
The sentiment towards SB239 has generally been positive among lawmakers, as it is seen as an essential measure to combat tax evasion and reinforce the integrity of the tax system. Supporters argue that the bill will help prevent tax fraud and ensure compliance among businesses, thereby promoting fairness in the market. However, there are concerns from some stakeholders about the implications this may have on legitimate businesses that might inadvertently find themselves captured in the net intended for tax evaders.
Contention
Notable points of contention regarding SB239 include the potential for unintended consequences where well-meaning businesses could be penalized if they do not fully understand the nuances of tax law, particularly in complex reorganization situations. Critics worry that such stringent provisions might deter business growth and entrepreneurship if business owners perceive the tax environment as overly punitive. Nevertheless, lawmakers defending the bill maintain that the overarching goal is to deter deliberate tax evasion while ensuring that businesses conduct themselves in compliance with applicable tax laws.
To provide for the payment of a vendor's compensation for the state sales and use tax collection and to dedicate certain state sales tax revenues (EN +$4,300,000 GF RV See Note)
Authorizes the secretary of the Department of Revenue to waive certain penalties associated with the payment of taxes on certain alcoholic beverages (EN SEE FISC NOTE SG RV See Note)
Exempts business utilities from state sales tax for businesses impacted by 2020 states of disaster or emergency. (gov sig) (Item #26) (OR -$84,400,000 GF RV See Note)