PRACTICE AND PROCEDURE: STATE AND FEDERAL TAX EXTENSIONS AVAILABLE FOR LOUISIANA TAXPAYERS AFFECTED BY HISTORIC BATON ROUGE FLOODS

Given the historic floods that have ravished Baton Rouge, Louisiana and surrounding areas in recent weeks, adhering to tax administration deadlines is likely a very low priority of affected businesses and individuals. According to a preliminary analysis of the potential economic impact of the flooding conducted by the Baton Rouge Area Chamber (BRAC), 110,000 homes worth $20.7 billion are located in the flood-impacted areas in the greater Baton Rouge region. While the number of homes that actually flooded is much lower—the state estimates at least 40,000—financial damages in the region will be extraordinary, according to BRAC’s report.

President Obama declared that a major disaster exists in Louisiana as a result of the flooding, and in turn, the Internal Revenue Service has offered tax relief to taxpayers who "reside or have a business" in any of the declared disaster areas. For federal excise tax and quarterly payroll tax returns, corporate, partnership and individual tax returns that have already been extended, and quarterly estimated tax payments, deadlines between Aug. 11, 2016 and Jan. 17, 2017, will be extended to Jan. 17, 2017. The IRS is also effectively extending the deadline for federal excise tax and employment tax deposits due on or after Aug. 11, 2016, as it will waive failure to deposit penalties when such deposits are made by Aug. 26, 2016.

Similarly, the Louisiana Department of Revenue is offering state tax relief to taxpayers that maintain their principal place of business, store critical tax records or reside in an area that was declared a federal disaster area.

Louisiana is extending the filing and payment due date to Jan. 17, 2017 for estimated tax payments, individual income, corporate income and franchise, fiduciary and partnership composite taxes with due dates between Aug. 11, 2016 and Jan. 17, 2017.

The state is also extending the filing and payment due date to Nov. 15, 2016 for various excise, severance and sales taxes with both original and extended filing and payment due dates between Aug. 11, 2016 and Oct. 31, 2016.

Finally, Louisiana is extending the due date to Nov. 30, 2016 for any withholding tax payments due between Aug. 11, 2016 and Nov. 15, 2016, and any withholding returns due on or before Oct. 31, 2016.

As long as affected taxpayers file the required returns and make the required payments by the extended due dates, Louisiana will not assess interest or late filing and late payment penalties that would typically apply. Paper filers should indicate their eligibility for the disaster extensions by writing “South La. Flooding 2016” at the top of their returns in black ink.

Thus far, the following parishes have been declared federal disaster areas: Acadia, Ascension, Avoyelles, East Baton Rouge, East Feliciana, Evangeline, Iberia, Iberville, Jefferson Davis, Lafayette, Livingston, Pointe Coupee, St. Helena, St. Landry, St. Martin, St. Tammany, Tangipahoa, Vermilion, Washington and West Feliciana.  

Continue the discussion on Bloomberg BNA’s State Tax Group on LinkedIn: Do federal and state disaster-related tax filing extensions positively impact economic recovery?

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