SLS 20RS-583 RE-REENGROSSED
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)) (See Act)
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
4 Department of Revenue and tax administration; to provide for the funding of the
5 Department of Revenue; to provide for the disposition of certain taxes, penalties, and
6 interest collected by the department; to provide for certain requirements and
7 limitations; to equalize the tax deficiency and refund interest rates; to provide for the
8 calculation of interest on certain overpayments; to provide for penalties for failure
9 to file a tax return; to provide for penalties for fraud, negligence, substantial
10 understatement of tax, and willful disregard of tax laws; to provide for definitions;
11 to provide for an effective date; and to provide for related matters.
12 Be it enacted by the Legislature of Louisiana:
13 Section 1. R.S. 47:1602(A)(4), 1603(A)(1), 1604, 1604.1, and 1624(A)(1) and (2)(b)
14 are hereby amended and reenacted and R.S. 47:1602(A)(5), 1608, and 1624(F) are hereby
15 enacted to read as follows:
16 §1602. Penalty for failure to make timely return
17 A. * * *
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1 (4)(a) When any taxpayer files a return required to be made under the
2 provisions of this Subtitle and pays the amount shown on the face of the return,
3 but fails to pay the full amount of tax actually due for the period within thirty
4 calendar days from the date of notice and demand therefor pursuant to R.S.
5 47:1562(B), the specific penalty may be one-half of one percent of the additional
6 tax due. If the failure to pay the additional tax due continues for more than
7 thirty days, an additional one-half of one percent shall be imposed for each
8 additional thirty days or fraction during which the failure to pay continues.
9 (b) The penalty imposed by this Paragraph for each thirty-day period
10 shall be calculated only on the additional amount due from the taxpayer, and
11 shall not be imposed for any thirty-day period for which the penalty provided
12 by Paragraphs (1), (2), or (3) of this Subsection is due.
13 (5) The penalties provided for by this Subsection shall not exceed twenty-five
14 percent of the tax in the aggregate.
15 * * *
16 §1603. Waiver of penalty for delinquent filing or delinquent payment
17 A.(1) If the failure to make any return at the time such return becomes due
18 or the filing of a return without remittance of the full amount due, action or failure
19 to act resulting in a penalty pursuant to R.S. 47:1602 or 1602.1 is attributable, not
20 to the negligence of the taxpayer, but to other cause set forth in written form and
21 considered reasonable by the secretary of the Department of Revenue, the secretary
22 may remit or waive payment of the whole or any part of the specific penalty
23 provided for such failure.
24 * * *
25 §1604. Penalty for false or fraudulent return
26 When the taxpayer files a return that is false or fraudulent or grossly incorrect
27 and the circumstances indicate that the taxpayer had intent to defraud the State of
28 Louisiana state of any tax due under this Sub-title Subtitle, there shall be imposed,
29 in addition to any other penalties provided, a specific penalty of fifty per centum
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1 (50%) seventy-five percent of the tax found to be due. This specific penalty shall
2 be an obligation to be collected and accounted for in the same manner as if it were
3 a part of the tax due, and can be enforced either in a separate action or in the same
4 action for the collection of the tax.
5 §1604.1. Negligence Accuracy-related penalty
6 A.(1) Finding of negligence. For negligent failure to comply with any
7 provisions of this Part Subtitle or any rules and regulations of the department, when
8 the secretary finds that a taxpayer did not have willful intent to defraud the state, the
9 provisions of R.S. 47:1604 and Subsection D of this Section do not apply the
10 secretary may assess a penalty equal to ten twenty percent of the tax deficiency
11 found to be due as a result of the taxpayer's negligence.
12 (2)(a) A penalty equal to the amount of the penalty that would be due
13 pursuant to Paragraph (1) of this Subsection shall be presumed to apply if the
14 taxpayer understates tax liability by ten percent or more but did not
15 demonstrate a willful disregard of the tax laws of this state.
16 (b) The penalty provided for pursuant to this Paragraph shall not be
17 applicable if a taxpayer's understatement was due, not to the negligence of the
18 taxpayer, but to other reasonable cause where the taxpayer acted in good faith.
19 B. Large individual income tax deficiency. In the case of individual income
20 tax, if a taxpayer understates tax table income, by any means, by an amount equal to
21 twenty-five percent or more of adjusted gross income or has otherwise demonstrated
22 a willful intent to disregard the tax laws of this state, the secretary may assess a
23 penalty equal to twenty percent of the deficiency. However, in the case of individual
24 income tax, if a taxpayer understates tax table income by an amount equal to
25 twenty-five percent or more of adjusted gross income but the secretary finds that the
26 taxpayer did not have willful intent to disregard the tax laws of this state, the
27 secretary may assess a penalty of fifteen percent of the deficiency of ten percent of
28 the deficiency in addition to any penalty provided for in Subsection A of this
29 Section.
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1 C. Other large tax deficiency. In the case of a tax other than individual
2 income tax, if a taxpayer understates tax liability by twenty-five percent or more, or
3 has otherwise demonstrated a willful intent to disregard the tax laws of this state, the
4 secretary may assess a penalty equal to twenty percent of the deficiency of ten
5 percent of the deficiency in addition to any penalty provided for in Subsection
6 A of this Section. However, in the case of a tax other than individual income tax, if
7 a taxpayer understates tax liability by twenty-five percent or more, but the secretary
8 finds that the taxpayer did not have willful intent to disregard the tax laws of this
9 state, the secretary may assess a penalty of fifteen percent of the deficiency.
10 D. Willful disregard for Louisiana tax laws. (1) If a taxpayer has
11 demonstrated a willful disregard of the tax laws of this state, the secretary may
12 assess a penalty of forty percent of the tax deficiency found to be due.
13 (2) If the penalty under this Subsection applies, then the penalty due
14 pursuant to the provisions of Subsections A, B, or C of this Section shall not be
15 applicable.
16 E. Definitions. For purposes of this Section, the following terms shall have
17 the following meanings unless the context clearly indicates otherwise:
18 (1) "Adjusted gross income" means gross income as defined in Section 62 of
19 the Internal Revenue Code.
20 (2) "Negligent failure" means any failure to make a reasonable attempt
21 to comply with the tax laws of this state, or a careless or reckless disregard for
22 the tax laws of this state.
23 (3) "Willful disregard" means voluntarily and intentionally acting in
24 violation of the tax laws of this state. The secretary shall use this definition of
25 "willful disregard" when determining whether a penalty shall be imposed for the
26 willful intent to defraud this state or willful intent to disregard of the tax laws of this
27 state. Willful disregard shall be presumed in any instance where a taxpayer fails
28 to timely remit tax withheld or collected from others.
29 * * *
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1 §1608. Disposition of penalties and self-generated revenue
2 A. Beginning July 1, 2022, the disposition of all state taxes, interest, and
3 penalties collected by or on behalf of the Department of Revenue pursuant to
4 the provisions of this Title shall be governed by the following:
5 (1) State taxes and interest. Beginning July 1, 2022, an amount equal to
6 one percent of all taxes and interest collected by or on behalf of the secretary of
7 the Department of Revenue pursuant to the provisions of Chapters 1, 2, 2-A,
8 2-B, or 5 of Subtitle II of this Title, shall be designated as self-generated revenue
9 of the Department of Revenue.
10 (2) Penalties. Beginning July 1, 2022, the full amount of penalties
11 collected by the secretary of the Department of Revenue pursuant to Part IV of
12 Chapter 18 of Subtitle II of this Title, shall be transferred to the state treasury
13 for deposit into the state general fund, provided that only the compensatory
14 expenses and fees collected pursuant to R.S. 47:1602.1, 1604.2, 1605, and 1606
15 shall be designated as self-generated revenue of the Department of Revenue.
16 B. Subject to appropriation by the legislature, monies designated as
17 self-generated revenues pursuant to the provisions of this Section, together with
18 any other revenues otherwise self-generated by the secretary, shall be used by
19 the Department of Revenue for the administration and collection of taxes, the
20 operation of the department, and fulfilling of the department's obligations
21 related to the costs of tax adjudication, and may be retained by the secretary
22 and carried forward for such purposes.
23 * * *
24 §1624. Interest on refunds
25 A.(1) Notwithstanding (a) Except as otherwise provided in this Section
26 and notwithstanding any other provision of law to the contrary, on all refunds or
27 credits the secretary shall compute and allow as part of the refund or credit, interest
28 at the annual rate established in R.S. 13:4202 from ninety days after the later of the
29 due date of the return, the filing date of the return or claim for refund on which the
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1 overpayment is claimed, or the date the tax was paid.
2 (b) Except as otherwise provided in Subparagraph (2)(a) of this
3 Subsection, and notwithstanding any other provision of law to the contrary,
4 beginning January 1, 2022, on all refunds or credits, the secretary shall compute
5 and allow as part of the refund or credit interest at the rate established for tax
6 obligations in R.S. 47:1601(A)(2) from ninety days after the later of the due date
7 of the return, the filing date of the return or claim for refund on which the
8 overpayment is claimed, or the date the tax was paid.
9 (c) An overpayment shall bear no interest if it is credited to the taxpayer's
10 account. No interest on refunds or credits shall be allowed if the secretary proves by
11 clear and convincing evidence that a person has deliberately overpaid a tax in order
12 to derive the benefit of the interest allowed by this Section. Payments of interest
13 authorized by this Section shall be made from funds derived from current collections
14 of the tax to be refunded or credited.
15 (2) Notwithstanding any provision of this Section, or any other provision of
16 law to the contrary, interest on a refund of an overpayment of severance tax to an
17 operator whose well qualifies for the severance tax suspension pursuant to R.S.
18 47:633(7)(c)(iii) or (9)(d)(v) for new horizontal or deep wells shall be paid as
19 follows:
20 * * *
21 (b) Interest on refunds made pursuant to this Subsection that are made after
22 the one hundred eightieth day after a properly filed claim for refund or an amended
23 return has been submitted to the department shall be the interest rate provided for in
24 Subparagraph (a) of this Paragraph for the first one hundred eighty days and at the
25 rate established in R.S. 13:4202 established for refunds of overpayments in R.S.
26 47:1624(A)(1)(b) for any period of time in excess of one hundred eighty days in
27 accordance with the provisions of Subsection A of this Section.
28 * * *
29 F. Notwithstanding any provision of this Section, or any other provision
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1 of law to the contrary, the accrual of interest shall be suspended during any
2 period of time that a delay in the issuance of a refund is attributable to the
3 taxpayer's failure to provide information or documentation required by statute
4 or regulation.
5 Section 2. Beginning July 1, 2020, any collection action taken by the secretary shall
6 apply the penalties provided for in this Act for all tax periods, and no penalty shall be due
7 pursuant to the provisions of R.S. 47:1602(A) for actions subject to penalty pursuant to
8 Paragraph (4) of that Subsection except as provided for pursuant to that Paragraph.
9 Section 3. Notwithstanding any provision of law to the contrary, no refund shall be
10 due to any taxpayer for any penalty paid pursuant to the laws of the state existing prior to
11 the effective date of this Act if the refund is based on a claim that no penalty would be due
12 pursuant to the provisions of this Act, nor if based on the claim that penalties paid pursuant
13 to R.S. 47:1602(A) prior to the effective date of this Act should not have been paid on the
14 underpayment of tax actually due.
15 Section 4. This Section and Sections 2, 3, and 5 of this Act shall become effective
16 upon the signature of the governor or, if not signed by the governor, upon expiration of the
17 time for bills to become law without signature by the governor, as provided by Article III,
18 Section 18 of the Constitution of Louisiana. If vetoed by the governor and subsequently
19 approved by the legislature, this Section and Sections 2, 3, and 5 of this Act shall become
20 effective on the day following such approval.
21 Section 5. Section 1 of this Act shall become effective January 1, 2021. If vetoed by
22 the governor and subsequently approved by the legislature, this Act shall become effective
23 on January 1, 2021.
The original instrument was prepared by Leonore Heavey. The following
digest, which does not constitute a part of the legislative instrument, was
prepared by Jerry G. Jones.
DIGEST
SB 334 Re-Reengrossed 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 (Section 1 of Act) retains present law failure to file and failure to pay penalties
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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)Accuracy related (R.S. 47:1604.1(A)), from 10% to 20% of deficiency.
(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.
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
from others.
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, 2022, the disposition of state taxes, interest,
and penalties collected by or on behalf of the Dept. of Revenue shall be governed by the
following. 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. With respect to
penalties collected by DOR, from July 1, 2022, and thereafter, 100% of penalties are to be
deposited into the state general fund. DOR will retain any compensatory fees and expenses
they collect. Self-generated revenues are 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 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.
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, 2022.
Proposed law (Section 2 of Act) 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 (Section 3 of Act) prohibits refunds of penalties paid before the effective date
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of this Act if the claim for refund is that no penalties would be due under the provisions of
this Act.
Proposed law provides that Section 1 of this Act shall become effective on Jan. 1, 2021.
Sections 2 and 3 shall become effective upon signature of governor or lapse of time for
gubernatorial action.
(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))
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.
Senate Floor Amendments to reengrossed bill
1. Technical.
2. Revised applicable dates and effective dates.
3. Provided relative to penalties and definitions.
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