Last week Louisiana briefly began the third and final installment of its multi-year amnesty program that was authorized by the Louisiana Tax Delinquency Amnesty Act of 2013 and modified by H.B. 663 in 2014. The 2015 program was temporarily suspended due to errors contained in some amnesty invitation letters, however, it will resume on Dec. 1 and run until the end of the year. Taxes due prior to Jan. 1, 2015 for which the Department of Revenue notified the taxpayer of a deficiency on or before May 31, 2015 are eligible for amnesty as are taxes for tax periods beginning before Jan. 1, 2015.
The amnesty programs have been hugely successful for Louisiana, generating approximately $435 million in delinquent tax collections under the 2013 program and $169 million under the 2014 program. All taxes administered by the Louisiana Department of Revenue are eligible except motor fuel taxes, prepaid cell phone sales tax, oil field restoration (oil and gas) fees and inspection and supervision fees. Also, penalties for failure to submit information reports that are not based on an underpayment of tax are ineligible for amnesty.
The 2015 program provides incentives that are significantly reduced from the levels of the previous two years. Taxpayers must pay or enter into an installment agreement to pay all of the outstanding tax and all fees and costs from the applicable tax periods, 83 percent of the interest outstanding and 67 percent of the penalties outstanding. The remaining 17 percent of the interest balance and 33 percent of the penalties balance will be waived by the Secretary of Revenue.
Under Louisiana Tax Amnesty 2014, eligible taxpayers were granted amnesty for 50 percent of the outstanding interest and penalties from the applicable tax periods. The conditions were even more favorable under the program’s first installment in 2013, as eligible taxpayers were granted amnesty for 50 percent of the outstanding interest and 100 percent of the outstanding penalties from the applicable tax periods.
Despite the diminishing amnesty returns, Louisiana taxpayers should strongly consider taking advantage of this last opportunity for relief because current law prohibits future amnesty programs before 2025.
Continue the discussion on Bloomberg BNA's State Tax Group on LinkedIn: Given how profitable the program was, is it likely that Louisiana will have another amnesty program in the near future?
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