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 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 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.