Louisiana takes steps to simplify sales and use tax administration
- Jul 3, 2017 | Gail Cole
Louisiana is taking steps to simplify state and local sales and use tax administration. HB 601, which took effect June 16, creates two entities designed to promote efficiency and uniformity in the imposition and collection of sales and use tax: the Uniform Local Sales Tax Board, and the Sales and Use Tax Commission for Remote Sellers. It also establishes an optional proceeding for situations when a taxpayer or dealer receives conflicting formal notices of assessment for one transaction.
Louisiana Uniform Local Sales Tax Board
The Uniform Local Sales Tax Board is designed to aid efficiency and uniformity in the imposition, collection, and administration of local sales and use taxes. Members include the executive directors of the Louisiana Municipal Association, School Boards Association, Policy Jury Association, and the Sheriffs Association. Its duties and powers include the following:
- Support and advise local sales and use tax collectors
- Promulgate rules and regulations
- Work with local tax collectors
- Work with legal counsel, analysts, auditors, appraisers, and witnesses
- Issue policy advise concerning local sales and use tax
- Prescribe uniform forms and model procedures to be used by local sales and use tax collectors
- Procure the development of computer software and equipment for the collection and administration of local sales and use taxes
- Issue private letter rulings concerning the imposition, collection, and administration of local sales and use tax upon request
The board will also help develop a “uniform voluntary disclosure program for taxpayers seeking relief from penalties in cases where a liability to more than one local sales and use tax collector is owed.” Additionally, it will create “uniform standards and forms for the purpose of refund requests for all local sales and use taxes.” It may also coordinate multi-parish audits.
Louisiana Sales and Use Tax Commission for Remote Sellers
The Sales and Use Tax Commission for Remote Sellers will be within the Department of Revenue, but the department “shall in no way interfere with, review, or change the decisions or operations” of the commission. It is tasked with simplifying state and local sales and use tax administration and collection for remote sellers (those based out of state).
In the event the United States Congress enacts a law authorizing states to require certain remote sellers to collect and remit sales and use tax, the commission would “serve as the single entity in Louisiana to require remote sellers and their designated agents to collect from customers and remit to the commission sales and use taxes on remote sales sourced to Louisiana.” It would also “establish a fiscal agent solely for the purpose of remote seller remittances.”
Several bills have been introduced in Congress that allow Louisiana to require remote sellers to collect and remit Louisiana sales and use tax. The Marketplace Fairness Act of 2017 and the Remote Transactions Parity Act of 2017 are the most recent iterations of these. Another is the Online Sales Simplification Act, which exists in draft form only. None have been taken up for consideration this session.
Optional concursus proceeding
The measure also creates a process to assist taxpayers and vendors facing a formal notice of assessment from two or more Louisiana local collectors with competing or conflicting claims to sales or use tax on a single transaction. Each could impose penalties and interest if payment isn’t received in a timely manner. HB 601 offers an optional way to ease some of the pain involved.
Affected taxpayers may file an optional concursus and pay the amount of sales tax collected, plus any applicable penalties and interest, into the Escrow Account for the Registry of the Board of Tax Appeals. For taxpayers who comply with the optional concursus provisions of the bill, “No additional interest or penalties shall accrue … on the amount of payment made … following the date of such payment.”
HB 601 provides additional details on all of the above.
Louisiana’s effort to simplify sales and use tax administration is commendable. Under the state’s home rule charter, certain local governments are entitled to administer their own sales and use taxes; this makes compliance extremely complex, especially for out-of-state businesses or businesses with locations throughout the state.
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