News and Insights

Legislative Action on Louisiana Refunds

Tax Development Mar 30, 2001

House Bill No. 14 amending the authorization for refund statute R.S. 47: 1621 was passed in the First Extraordinary Session, 2001 of the Louisiana Legislature.

House Bill No. 14 was created in response to the Louisiana Department of Revenue and Taxation's ("Department") practice of denying refunds on the basis of a literal interpretation of R.S. 47: 1621. The statute contained two criteria which would allow the Department to refund an overpayment: The overpayment had to be a mathematical error or a construction of the law contrary to that of the Department. For example, under the literal interpretation, if a duplicate payment was made in error, the Department could deny a refund under R.S. 47: 1621. This interpretation, right or wrong, led to many inequities in the denial of refunds, resulting in the Department collecting, and keeping, funds that were not due to the Department.

The statute was amended to include the following criteria:

B. (3) "The overpayment was the result of an error, omission, or a mistake of fact of consequence to the determination of the tax liability, whether on the part of the taxpayer or the secretary."

B. (8) "The overpayment resulted from a subsequent determination that the taxpayer was entitled to pay a tax at a reduced rate."

B. (9) "The overpayment was the result of a payment that exceeded either the amount shown on the face of the return or voucher, or which would have been shown on the face of the return or voucher if a return or voucher were required."

The bill also included language that stated where there is clear and convincing evidence that an overpayment has been made, the secretary shall make a refund.

According to the new legislation the overpayment will be refunded over a period of time equal to the number of periods included in the refund request.

The bill is retroactive so that it will allow a refund for all of those taxpayers who have identified overpayments, have had refund requests denied because of the Department's earlier position, or who will identify overpayments that were made in previous periods. The amendments to R.S. 47: 1621 are applicable to periods open by statute and for all periods for which prescription has been suspended. The bill is awaiting the Governor's signature.

If you would like a copy of the bill or have any questions about the bill, contact Timmy Hulin, Manager - Louisiana Tax Services at 225.334.0040.