RDCSB334 416 2601
DIGEST
The digest printed below was prepared by House Legislative Services. It constitutes no part
of the legislative instrument. The keyword, one-liner, abstract, and digest do not constitute
part of the law or proof or indicia of legislative intent. [R.S. 1:13(B) and 24:177(E)]
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 the 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 .5% instead of 5% per month.
Proposed law retains the 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 provides that when the state collector determines to waive or remit all or any
part of a penalty for failure to timely file a return, the collector's determination shall be
submitted to the board for review. If the board finds that the penalty may properly be
waived or remitted, it shall approve the action of the collector. However, if the board rejects
the proposal to waive or remit, the collector shall assess and collect the penalty.
Proposed law changes present law by removing the requirement that the penalty waiver be
submitted to the board for review and approval. Proposed law clarifies that no provision of
proposed law is intended to expand the jurisdiction of the board to reconsider or review the
state collector's discretionary functions related to penalties, including the denial of the
waiver of any penalty due. Further clarifies that proposed law is not intended to constrain
the board's jurisdiction in a matter concerning whether a penalty is due under the relevant
facts and applicable law.
Present law defines willful disregard 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 when a taxpayer fails to timely remit tax withheld or collected
from others absent a showing of good cause.
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 Jan. 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
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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 Jan. 1, 2021, any collection action
taken by the secretary shall be subject to the penalties provided for in proposed law for all
tax periods.
Proposed law (Section 3 of Act) prohibits refunds of penalties paid before Jan. 1, 2021, if
the claim for refund is that no penalties would be due under the provisions of proposed law.
Proposed law provides that Section 1 of this Act shall become effective on Jan. 1, 2021.
Sections 2, 3, 4, 5, and 6 shall become effective upon signature of governor or lapse of time
for gubernatorial action.
(Amends R.S. 47:1451, 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.
Summary of Amendments Adopted by House
The Committee Amendments Proposed by House Committee on Ways and Means to the
re-reengrossed bill:
1. Remove requirements that the penalty waiver be submitted to the board for
review and approval.
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2. Clarify that proposed law is not intended to expand the jurisdiction of the board
to reconsider or review the state collector's discretionary functions related to
penalties or to constrain the board's jurisdiction in a matter concerning whether
a penalty is due under facts and law.
3. Change the presumption of willful intent to disregard to when a taxpayer fails to
timely remit tax withheld or collected from others absent a showing of good
cause.
4. Change the effective date of when collection actions taken by the secretary shall
be subject to the penalties provided for in proposed law from all tax periods
beginning July 1, 2020, to all tax periods beginning Jan. 1, 2021.
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