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2020 Regular Session
SENATE BILL NO. 334
BY SENATOR ALLAIN
REVENUE DEPARTMENT. Provides for the funding of the operations of the Department
of Revenue. (2/3 - CA7s2.1(A)) (7/1/20)
1 AN ACT
2 To amend and reenact R.S. 47:1602(A)(4), 1603(A)(1), 1604, 1604.1, and 1624(A)(1) and
3 (2)(b) and to enact R.S. 47:1602(A)(5), 1608, and 1624(F) relative to the Department
4 of Revenue and tax administration; to provide for the funding of the Department of
5 Revenue; to provide for the disposition of certain taxes, penalties, and interest
6 collected by the department; to provide for certain requirements and limitations; to
7 equalize the tax deficiency and refund interest rates; to provide for the calculation
8 of interest on certain overpayments; to provide for certain limitations and
9 requirements; to provide for penalties for failure to file a tax return; to provide for
10 penalties for fraud, negligence, substantial understatement of tax, and willful
11 disregard of tax laws; to provide for definitions; to provide for an effective date; and
12 to provide for related matters.
13 Be it enacted by the Legislature of Louisiana:
14 Section 1. R.S. 47:1602(A)(4), 1603(A)(1), 1604, 1604.1, and 1624(A)(1) and (2)(b)
15 are hereby amended and reenacted and R.S. 47:1602(A)(5), 1608, and 1624(F) are hereby
16 enacted to read as follows:
17 §1602. Penalty for failure to make timely return
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1 A. * * *
2 (4)(a) When any taxpayer files a return required to be made under the
3 provisions of this Subtitle and pays the amount shown on the face of the return,
4 but fails to pay the full amount of tax actually due for the period within thirty
5 calendar days from the date of notice and demand therefor pursuant to R.S.
6 47:1562(B), the specific penalty may be one-half of one percent of the additional
7 tax due. If the failure to pay the additional tax due continues for more than
8 thirty days, an additional one-half of one percent shall be imposed for each
9 additional thirty days or fraction during which the failure to pay continues.
10 (b) The penalty imposed by this Paragraph for each thirty-day period
11 shall be calculated only on the additional amount due from the taxpayer, and
12 shall not be imposed for any thirty-day period for which the penalty provided
13 by Paragraphs (1), (2), or (3) of this Subsection is due.
14 (5) The penalties provided for by this Subsection shall not exceed twenty-five
15 percent of the tax in the aggregate.
16 * * *
17 §1603. Waiver of penalty for delinquent filing or delinquent payment
18 A.(1) If the failure to make any return at the time such return becomes due
19 or the filing of a return without remittance of the full amount due, action or failure
20 to act resulting in a penalty pursuant to R.S. 47:1602 or 1602.1 is attributable, not
21 to the negligence of the taxpayer, but to other cause set forth in written form and
22 considered reasonable by the secretary of the Department of Revenue, the secretary
23 may remit or waive payment of the whole or any part of the specific penalty
24 provided for such failure.
25 * * *
26 §1604. Penalty for false or fraudulent return
27 When the taxpayer files a return that is false or fraudulent or grossly incorrect
28 and the circumstances indicate that the taxpayer had intent to defraud the State of
29 Louisiana state of any tax due under this Sub-title Subtitle, there shall be imposed,
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1 in addition to any other penalties provided, a specific penalty of fifty per centum
2 (50%) seventy-five percent of the tax found to be due. This specific penalty shall
3 be an obligation to be collected and accounted for in the same manner as if it were
4 a part of the tax due, and can be enforced either in a separate action or in the same
5 action for the collection of the tax.
6 §1604.1. Negligence penalty
7 A. Finding of negligence. For negligent failure to comply with any provisions
8 of this Part Subtitle or any rules and regulations of the department, when the
9 secretary finds that a taxpayer did not have willful intent to defraud the state, the
10 provisions of R.S. 47:1604 and Subsection D of this Section do not apply the
11 secretary may assess a penalty equal to ten twenty percent of the tax deficiency
12 found to be due as a result of the taxpayer's negligence.
13 B. Large individual income tax deficiency. In the case of individual income
14 tax, if a taxpayer understates tax table income, by any means, by an amount equal to
15 twenty-five percent or more of adjusted gross income or has otherwise demonstrated
16 a willful intent to disregard the tax laws of this state, the secretary may assess a
17 penalty equal to twenty percent of the deficiency. However, in the case of individual
18 income tax, if a taxpayer understates tax table income by an amount equal to
19 twenty-five percent or more of adjusted gross income but the secretary finds that the
20 taxpayer did not have willful intent to disregard the tax laws of this state, the
21 secretary may assess a penalty of fifteen percent of the deficiency of ten percent of
22 the deficiency in addition to any penalty provided for in Subsection A of this
23 Section.
24 C. Other large tax deficiency. In the case of a tax other than individual
25 income tax, if a taxpayer understates tax liability by twenty-five percent or more, or
26 has otherwise demonstrated a willful intent to disregard the tax laws of this state, the
27 secretary may assess a penalty equal to twenty percent of the deficiency of ten
28 percent of the deficiency in addition to any penalty provided for in Subsection
29 A of this Section. However, in the case of a tax other than individual income tax, if
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1 a taxpayer understates tax liability by twenty-five percent or more, but the secretary
2 finds that the taxpayer did not have willful intent to disregard the tax laws of this
3 state, the secretary may assess a penalty of fifteen percent of the deficiency.
4 D.(1) Willful disregard for Louisiana tax laws. If a taxpayer has
5 demonstrated a willful disregard of the tax laws of this state, the secretary may
6 assess a penalty of forty percent of the tax deficiency found to be due.
7 (2) If the penalty under this Subsection applies, then the penalty due
8 pursuant to the provisions of Subsections A, B, or C of this Section shall not be
9 applicable.
10 E. For purposes of this Section, the following terms shall have the following
11 meanings unless the context clearly indicates otherwise:
12 (1) "Adjusted gross income" means gross income as defined in Section 62 of
13 the Internal Revenue Code.
14 (2) "Negligent failure" means any failure to make a reasonable attempt
15 to comply with the tax laws of this state, or a careless or reckless disregard for
16 the tax laws of this state. Negligent failure shall be presumed in any instance
17 where the taxpayer understates tax liability by ten percent or more but did not
18 demonstrate a willful disregard of the tax laws of this state.
19 (3) "Willful disregard" means voluntarily and intentionally acting in
20 violation of the tax laws of this state. The secretary shall use this definition of
21 "willful disregard" when determining whether a penalty shall be imposed for the
22 willful intent to defraud this state or willful intent to disregard of the tax laws of this
23 state. Willful disregard shall be presumed in any instance where a taxpayer fails
24 to timely remit tax withheld or collected.
25 * * *
26 §1608. Disposition of penalties and self-generated revenue
27 A. The disposition of all state taxes, interest, and penalties collected by
28 or on behalf of the Department of Revenue pursuant to the provisions of Title
29 47 of the Louisiana Revised Statutes of 1950, as amended, shall be governed by
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1 the following:
2 (1) State taxes and interest. Beginning July 1, 2020, an amount equal to
3 one percent of all taxes and interest collected by or on behalf of the secretary of
4 the Department of Revenue pursuant to the provisions of Chapters 1, 2, 2-A,
5 2-B, or 5 of Subtitle II of Title 47 of the Louisiana Revised Statutes of 1950, shall
6 be designated as self-generated revenue of the Department of Revenue.
7 (2) Penalties. Beginning July 1, 2020, the full amount of penalties
8 collected by the secretary of the Department of Revenue pursuant to Part IV of
9 Chapter 18 of Subtitle II of Title 47 of the Louisiana Revised Statutes of 1950,
10 shall be transferred to the state treasury for deposit into the state general fund,
11 provided that only the compensatory expenses and fees collected pursuant to
12 R.S. 47:1602.1, 1604.2, 1605, and 1606 shall be designated as self-generated
13 revenue of the Department of Revenue.
14 B. Subject to appropriation by the legislature, monies designated as
15 self-generated revenues pursuant to the provisions of this Section, together with
16 any other revenues otherwise self-generated by the secretary, shall be used by
17 the Department of Revenue for the administration and collection of taxes, the
18 operation of the department, and fulfilling of the department's obligations
19 related to the costs of tax adjudication, and may be retained by the secretary
20 and carried forward for such purposes.
21 * * *
22 §1624. Interest on refunds
23 A.(1) Notwithstanding (a) Except as otherwise provided in this Section
24 and notwithstanding any other provision of law to the contrary, on all refunds or
25 credits the secretary shall compute and allow as part of the refund or credit, interest
26 at the annual rate established in R.S. 13:4202 from ninety days after the later of the
27 due date of the return, the filing date of the return or claim for refund on which the
28 overpayment is claimed, or the date the tax was paid.
29 (b) Except as otherwise provided in Subparagraph (2)(a) of this
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1 Subsection, and notwithstanding any other provision of law to the contrary,
2 beginning January 1, 2021, on all refunds or credits, the secretary shall compute
3 and allow as part of the refund or credit interest at the rate established for tax
4 obligations in R.S. 47:1601(A)(2) from ninety days after the later of the due date
5 of the return, the filing date of the return or claim for refund on which the
6 overpayment is claimed, or the date the tax was paid.
7 (c) An overpayment shall bear no interest if it is credited to the taxpayer's
8 account. No interest on refunds or credits shall be allowed if the secretary proves by
9 clear and convincing evidence that a person has deliberately overpaid a tax in order
10 to derive the benefit of the interest allowed by this Section. Payments of interest
11 authorized by this Section shall be made from funds derived from current collections
12 of the tax to be refunded or credited.
13 (2) Notwithstanding any provision of this Section, or any other provision of
14 law to the contrary, interest on a refund of an overpayment of severance tax to an
15 operator whose well qualifies for the severance tax suspension pursuant to R.S.
16 47:633(7)(c)(iii) or (9)(d)(v) for new horizontal or deep wells shall be paid as
17 follows:
18 * * *
19 (b) Interest on refunds made pursuant to this Subsection that are made after
20 the one hundred eightieth day after a properly filed claim for refund or an amended
21 return has been submitted to the department shall be the interest rate provided for in
22 Subparagraph (a) of this Paragraph for the first one hundred eighty days and at the
23 rate established in R.S. 13:4202 established for refunds of overpayments in R.S.
24 47:1624(A)(1)(b) for any period of time in excess of one hundred eighty days in
25 accordance with the provisions of Subsection A of this Section.
26 * * *
27 F. Notwithstanding any provision of this Section, or any other provision
28 of law to the contrary, the accrual of interest shall be suspended during any
29 period of time that a delay in the issuance of a refund is attributable to the
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1 taxpayer's failure to provide information or documentation required by statute
2 or regulation.
3 Section 2. Beginning July 1, 2020, any collection action taken by the secretary shall
4 apply the penalties provided for in this Act for all tax periods, and no penalty shall be due
5 pursuant to the provisions of R.S. 47:1602(A) for actions subject to penalty pursuant to
6 Paragraph (4) of that Subsection except as provided for pursuant to that Paragraph.
7 Section 3. Notwithstanding any provision of law to the contrary, no refund shall be
8 due to any taxpayer for any penalty paid pursuant to the laws of the state existing prior to
9 the effective date of this Act if the refund is based on a claim that no penalty would be due
10 pursuant to the provisions of this Act, nor if based on the claim that penalties paid pursuant
11 to R.S. 47:1602(A) prior to the effective date of this Act should not have been paid on the
12 underpayment of tax actually due.
13 Section 4. This Act shall become effective July 1, 2020. If vetoed by the governor
14 and subsequently approved by the legislature, this Act shall become effective on
15 July 1, 2020, or the day following such approval, whichever is later.
The original instrument was prepared by Leonore Heavey. The following
digest, which does not constitute a part of the legislative instrument, was
prepared by Curry J. Lann.
DIGEST
SB 334 Engrossed 2020 Regular Session Allain
Present law establishes separate penalties for the failure to make timely return and for the
failure to pay full amount of tax due shown on the return.
Proposed law retains present law failure to file and failure to pay penalties and provides for
a reduced penalty when the taxpayer fails to pay the full amount due that was required to be
shown on the return at the rate of ½ of 1% instead of 5% per month.
Proposed law retains present law maximum of 25% of the tax for the combined failure to file
and failure to pay penalties.
Present law provides for penalties for fraud, negligence, and large tax deficiencies of 25%
or more.
Proposed law changes the penalty rates for fraud, negligence, and large tax deficiencies as
follows:
(1)Fraud (R.S. 47:1604), from 50% to 75% of deficiency.
(2)Negligence (R.S. 47:1604.1(A)), from 10% to 20% of deficiency.
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(3)Large individual tax deficiency (R.S. 47:1601.1(B)), from a maximum of 20% to
10% of deficiency.
(4)Other large tax deficiency (R.S. 47:1601.1(C)), from a maximum of 20% to 10% of
deficiency.
Proposed law defines negligent failure as any failure to make a reasonable attempt to comply
with the tax laws of this state or a careless or reckless disregard for the tax laws of the state.
Proposed law creates a presumption of negligent failure where there is an understatement
of tax liability of 10% or more and there is no indication of willful disregard of the state's
tax laws.
Present law defines willful as "voluntarily and intentionally acting in violation of the tax
laws of this state." Proposed law retains present law and adds a presumption of willful intent
to disregard in any instance where a taxpayer fails to timely remit tax withheld or collected.
Proposed law authorizes an additional penalty for willful disregard of the state's tax laws of
40% of the deficiency.
Proposed law provides that beginning July 1, 2020, an amount equal to 1% of the state sales,
corporation income and franchise, and individual income taxes and interest collected by or
on behalf of the Dept. of Revenue (DOR) shall be designated as self-generated revenue of
the department.
Proposed law requires, with respect to penalties collected by DOR, that from July 1, 2020,
and thereafter, 100% of penalties be deposited into the state general fund.
Proposed law provides that DOR will retain any compensatory fees and expenses they
collect.
Proposed law requires the self-generated revenues to be used by DOR for the administration
and collection of taxes and for operation of the department, subject to appropriation by the
legislature.
Proposed law requires that beginning July 1, 2020, any collection action taken by the
secretary shall apply the penalties provided for in this Act for all tax periods.
Proposed law prohibits refunds of penalties paid before the effective date of this Act if the
claim for refund is that no penalties would be due under the provisions of this Act.
Present law provides for interest on unpaid taxes at three percentage points above the judicial
interest rate and interest on refunds of overpaid taxes at the judicial interest rate.
Proposed law equalizes the interest rates on refunds and unpaid taxes by increasing the
interest rate on refunds to three points above the judicial interest rate beginning Jan. 1, 2021.
Proposed law suspends the accrual of interest during any period of time that a delay in the
issuance of a refund is attributable to the taxpayer's failure to provide information or
documentation required by statute or regulation.
Effective July 1, 2020.
(Amends R.S. 47:1602(A)(4), 1603(A)(1), 1604, 1604.1, and 1624(A)(1) and (2)(b); adds
R.S. 47:1602(A)(5), 1608, and 1624(F))
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Summary of Amendments Adopted by Senate
Committee Amendments Proposed by Senate Committee on Revenue and Fiscal
Affairs to the original bill
1. Adds presumption of willful intent to disregard in any instance where a
taxpayer fails to timely remit tax withheld or collected.
2. Suspends the accrual of interest during any period of time that a delay in the
issuance of a refund is attributable to the taxpayer's failure to provide
information or documentation required by statute or regulation.
3. Makes technical corrections to the interest rate of certain severance taxes.
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