State Tax Issues
Tuesday, February 18, 2014
Electronic Funds Transfer Requirements
Louisiana Revised Statute 47:1519 authorizes the Louisiana Department of Revenue (LDR) to require electronic payments from business taxpayers whose individual payments exceed $5,000.Electronic Funds Transfer (EFT) payment is required for business taxes under all of the following circumstances:
- The tax due in connection with the filing of any return, report or other document that exceeds $5,000.
- A taxpayer files tax returns more frequently than monthly, and during the preceding 12-month period, the average total payment exceeds $5,000.
- A company files withholding tax returns and payments on behalf of other taxpayers during the preceding 12-month period and the average total payments for all tax returns filed exceed $5,000.
If an EFT payment is not timely made or if the required tax return is not filed by the due date, the provisions for late payment penalties, late filing penalties, interest, and loss of applicable discount shall apply in accordance with R.S. 47:1601-1602.
If an EFT payment requirement has been established even if the tax amount due falls below the threshold, EFT payments will be required.
Business Tax Accounts Must Be Closed to Avoid Non-Filing Assessments
Annual Louisiana Corporation Income and Franchise Tax (CIFT) returns continue to be due until LDR receives notification that a corporation's charter is dissolved, liquidated, or withdrawn through the LA Secretary of State.Until LDR is notified of dissolution or withdrawal, and the corporation's Revenue tax account is officially closed, LDR will issue non-filing tax assessments.
CIFT returns continue to be due as well for any entity whose charter is revoked by the Secretary of State. Following revocation, the corporation must still dissolve or withdraw through the Secretary of State's office, and request the closure of its LDR Revenue account.
When an entity is no longer active, and has withdrawn from the Secretary of State, it should request the closure of its tax account by submitting Form R-3406, "Request to Close Business Tax Accounts". A copy of the Secretary of State letter of dissolution or withdrawal must be attached.
The Internal Revenue Service provides LDR with tax return information for all taxpayers who file federal income tax returns with Louisiana addresses. Individuals who are domiciled, reside, or have a permanent residence in LA are required to file a LA individual income tax return and report all of their income and pay LA income tax on that income, if applicable. Revised Statute 47:31 provides that individuals who reside in the state for more than six months are considered residents of the state for the entire year.A temporary absence from LA does not automatically change the taxpayer’s domicile for income tax purposes. The taxpayer must confirm their intention to change domicile to another state by actions taken to establish a new domicile outside of LA. Examples of establishing a domicile include registering to vote, registering and titling vehicles, obtaining a driver’s license, changing children’s school of attendance, obtaining a homestead exemption, or any other actions that show intent to establish a new domicile outside of Louisiana.
To prove that you were not a LA resident and not required to file a state individual income tax return, you must provide documentation that confirms your domicile in the other state. Proof can be established with a copy of your other state voter registration, automobile registration or license, your driver’s license, etc. If you maintain a residence in Louisiana while working in another state, you would still be considered a Louisiana resident required to pay Louisiana income tax.
Military personnel who reside in LA, but have a home of record in another state only have to file a LA return to report any nonmilitary LA sources income on Form IT-540B. The federal Military Spouses Residency Relief Act has extended certain residency protections to spouses of military members. Spouses not residents of LA, but living and working in LA solely to be with a LA stationed service member do not pay income tax on wages, interest or dividends.
Office of Debt Recovery
Act 399 creates the Office of Debt Recovery within the Louisiana Department of Revenue. It will be responsible for collection of a tax and delinquent debts of other state agencies. State agencies will refer debt to the Office of Debt Recovery or the Attorney General’s Office as provided by statute. The department may treat the delinquent debt as an assessment that has become final and may use state remedies provided by state law to facilitate the collection of taxes to collect the delinquent debt. Effective June 17, 2013.
Composite Partnership Returns
Tax credits will be allowed. Returns must be submitted electronically only via MEF and are for Non-resident individual partners only. Resident partners cannot be included. Beginning with returns due on or after May 15, 2014, extension requests are required to be submitted electronically also. See RIB No. 13-029.
Transferable Tax Credit Registry
Act 418 of the 2013 Regular Session enacted the Louisiana Tax Credit Registry Act. The Act:
- Establishes a central registration system managed by LDR
- Provides for the security and transparency of transfers of state tax credits
- Gives investors assurance and the ability to verify the status and validity of a tax credit in a central place
- Provides records of the amount of credits issued, transferred and claimed.
For more information on the tax credit registry see Revenue Information Bulletins No. 13-021 and No. 14-005.
Helpful Contact Information
Office Audit Contact:Mail:
PO Box 66362
Baton Rouge, LA 70896-6362
For Requested Documentation: (225) 231-6238
For Tax Return Attachments: (225) 231-6621
Note: Do not use this fax number for any of the following:
- Information specifically requested by LDR personnel.
- Documents that are required to be filed electronically with the federal tax return such as W-2’s and 1099 R’s.
- Form LA 8453, the Individual Income Tax Declaration for Electronic Filing, which must be maintained by the tax preparer.
Collection Division Contact Mail:
PO Box 66658
Baton Rouge, LA 70896-6658
General Phone Number: (225) 219-2244
Installment Arrangements: (225) 219-7448
For Driver’s License Clearance: (225) 219-0866
For Individual Accounts: (225) 219-2256
For Business Accounts: (225) 219-0865
Tax Practitioner Liaison Contact:
Barbara ReevesAttribution and thanks are extended to Gerard H. Schreiber, Jr., CPA, who contributed content for this alert.
PO Box 44098
Baton Rouge, LA 70804
Phone: (225) 219-2525
Fax: (225) 219-2759