Archive for December, 2009

LDR News Release – Department of Revenue eliminates contracts in mid-year budget adjustment

BATON ROUGE – The Louisiana Department of Revenue (LDR) is eliminating more than $1 million dollars in professional services contracts as part of an across-the-board 7.56 percent mid-year reduction for every state agency.

This adjustment eliminates $1,060,656 in contracts primarily to augment LDR’s information technology staff. The figure represents a 7.56 percent reduction in the $12.7 million in general fund monies that LDR received this fiscal year.

Previous cost-cutting measures included the closures of some LDR regional offices, employee layoffs, and expanded reliance on electronic customer service applications.

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Department of Revenue issues new RIBs related to corporation income and franchise taxes

The Louisiana Department of Revenue (LDR) has issued Revenue Information Bulletin (RIB) 09-055 explaing changes for obtaining a corporate income and franchise tax filing extension beginning with 2009 tax returns due in 2010.


Beginning with corporation income and franchise tax returns due on or after January 1, 2010, corporate taxpayers who need additional time to file their Louisiana corporation income and franchise tax returns will need to request a specific state filing extension, submit a paper copy of the taxpayer’s Federal Application for Automatic Extension of Time To File, or request an extension via an electronic application. Regardless of which option is used, all extension requests must be made on or before the return’s due date. The return’s due date is April 15th for calendar year filers, and the 15th day of the fourth month following the close of the taxable year for fiscal year filers.

Background

The secretary of revenue is authorized, but not required, to accept an extension of time to file a federal income tax return as an extension of time to file a Louisiana corporation income and franchise tax return. It has been the Louisiana Department of Revenue (LDR) practice in past years to use this authorization to accept federal extensions, with copies of the federal extensions submitted with the Louisiana return. The evolution of technology has allowed the IRS to grant federal extensions electronically, with a notation made to the taxpayer’s IRS account and no paper extension issued to the taxpayer. The increased use of “paperless” federal extensions has made it impossible for taxpayers to attach a copy of the federal extension to their state returns. At the same time, increased use of technology by the LDR has made obtaining a state extension via the Internet possible.

Extension Requests

To obtain a state corporation income and franchise tax filing extension, taxpayers must make the request on or before the tax return’s due date. Extensions may be requested by:

    a. Requesting the extension electronically through the LDR web site;
    b. Submitting an Application for Extension to File Corporation Income and Franchise Tax, Form CIFT-620Ext, available on the Department of Revenue’s web site at: www.revenue.louisiana.gov;
    c. Submitting a paper copy of the IRS Automatic Extension of Time to File Certain Business Income Tax, Information, and Other Returns, Form 7004.

Copies of the state and federal extensions should be mailed to Post Office Box 751, Baton Rouge, LA 70821-0751.

A corporation income and franchise tax filing extension granted by the secretary only allows for an extension of time to file the tax return. The extension does not allow an extension of time to pay the tax due. To avoid interest and penalty assessments, estimated taxes should be paid on or before the original due date.

Questions should be addressed to the Department of Revenue at (225) 219-0067, or (225) 219-7462.

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LDR has also recently issued several other RIBs that may be of interest to corporate income and franchise tax filers and preparers:

RIB 09-054 Minimum Franchise Tax Repealed; $10 Initial Franchise Tax Imposed on New Corporations

RIB 09-046 Changes to the General Credits Provision

RIB 09-044 New Markets Tax Credit Available December 2009

RIB 09-042 Live Performance Income Tax Credit Changes

RIB 09-041 Motion Picture Investor Tax Credit Changes

RIB 09-039 Act 454 Changes to the Digital Interactive Media Tax Credit

RIB 09-038 Historic Rehabilitation Tax Credit Changes

RIB 09-029 Tax Credit for Conversion of Vehicles to Alternative Fuel Usage

RIB 09-027 Act 467 Expands the Wind or Solar Energy Systems Tax Credit

RIB 09-026 Sugarcane Trailer Tax Credit in Effect for 2009 Tax Year

RIB 09-023 Sound Recording Tax Credit Changes

RIB 09-020 Research and Development Tax Credit Changes


A Revenue Information Bulletin (RIB) is issued under the authority of LAC 61:III.101(D). A RIB is an informal statement of information issued for the public and employees that is general in nature. A RIB does not have the force and effect of law and is not binding on the public or on the Departmentof Revenue.

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LDR schedules hearing on proposed changes to taxation of the administration of prescription drugs

The Louisiana Department of Revenue (LDR) has published a notice of its intent to amend LAC 61:I.4401 to provide with respect R.S. 47:305(D)(4)(b).

This statute provides that the administration of prescription drugs used exclusively by the patient in the medical treatment of various diseases or injuries when administered exclusively to the patient by a physician, nurse, or other health care professional in a physician’s office where patients are not regularly kept as bed patients for twenty-four hours or more, shall be a professional service. Although R.S. 47:305(D)(4)(b) applies to both state sales and use taxes and to the sales and use taxes of political subdivisions of the state, this statute providing with respect to the taxation of chemotherapy drugs and the proposed amended rule will primarily affect local sales and use taxation.

The proposed amendments to LAC 61:I.4401 are available on the LDR website using the link provided.

Interested persons may submit data, views, or arguments, in writing to Raymond E. Tangney, Senior Policy Consultant, Policy Services Division, P.O. Box 44098, Baton Rouge, LA 70804-4098 or by fax to (225) 219-2759. All comments must be submitted by 4:30 p.m., Tuesday, January 26, 2010.

A public hearing will be conducted on Wednesday, January 27, 2010, at 2 p.m. at the Department of Revenue Headquarters Building, 617 North Third Street, Baton Rouge, LA.

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Department of Revenue announces 2010 interest rates on tax refunds and assessments

The Louisiana Department of Revenue announces the 2010 interest rates for tax assessments and refunds.

Revenue Information Bulletin (RIB) 10-001 explains the 2010 interest rate on unpaid taxes.

Revenue Information Bulletin (RIB) 10-002 explains the 2010 interest rate on refunds of tax overpayments.


A Revenue Information Bulletin (RIB) is issued under the authority of LAC 61:III.101(D). A RIB is an informal statement of information issued for the public and employees that is general in nature. A RIB does not have the force and effect of law and is not binding on the public or on the Department of Revenue.

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Emergency Rule Concering Prepaid Wireless Service Charge

The Louisiana Department of Revenue (LDR) has adopted an Emergency Rule related to the service charge on sales of prepaid wireless telecommunications authorized by Act 531 of the 2009 Regular Session of the Legislature. The Emergency Rule, LAC 61:I.5401, is available on the LDR website using the link provided.

Retailers must collect the two percent service charge on sales of prepaid wireless service beginning January 1, 2010.  This Emergency Rule shall be effective January 1, 2010, and shall remain in effect until the expiration of the maximum period allowed under the Administrative Procedure Act or the adoption of the final Rule, whichever comes first.

This emergency rule was originally published on October 20, 2009, and was re-published on December 20, 2009, in essentially the same language. The emergency rule was re-published on December 20 in order that the Louisiana Department of Revenue will be in compliance with the requirements of R.S. 49:953(B)(2) that emergency rules be published in the Louisiana Register within 60 days of their proposed effective dates.

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Revenue Information Bulletin 09-056 – Crude Oil and Natural Gas Severance Tax Filing Changes

The Louisiana Department of Revenue has issued Revenue Information Bulletin (RIB) 09-056 explaining changes for the filing of oil and natural gas severance taxes.


Beginning with the January 2010 Severance Tax reports, due March 25, 2010, prior period amended credit returns will no longer be allowed to be offset against amounts owed. Instead, credit amounts will be refunded.

Reporting and Adjustments to Prior Periods

Severance taxpayers who file paper returns must file separate detail returns and summaries for each tax period. In addition, changes to prior periods must be reported on separate amended returns for each tax period. Taxpayers who file electronically will report the current month’s detail information separately from amended returns and pay the correct amount of tax due as shown on the current month’s return.

Because prior period credits can no longer be used to offset amounts owed, payment of amounts owed on returns must be made with each return. Credits resulting from changes reported on amended returns will be refunded.

Electronic Filing and Payment

The following forms may be filed electronically:

  • Oil or Gas Severance Tax Return-Lease Detail (Ol-d & G-ld);
  • Incapable/Stripper Well Reports (O-3 & G-3); and,
  • Well Reports for Exempt Wells (O-5 & G-5).

The Severance Parish Summaries (O1-S & G1-S) will be automatically created from the lease detail filings.

Taxpayers who file a return electronically will no longer automatically be mailed paper returns. However, a paper return will be mailed upon request.

Electronic tax payments may be made using existing electronic funds transfer payment methods, or by E-check, which is a new service available through the Department of Revenue’s web site.
Additional information about severance tax forms and instructions can be obtained from the Department’s web site at: www.revenue.louisiana.gov.


A Revenue Information Bulletin (RIB) is issued under the authority of LAC 61:III.101(D). A RIB is an informal statement of information issued for the public and employees that is general in nature. A RIB does not have the force and effect of law and is not binding on the public or on the Department of Revenue.

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2008-2009 Louisiana Department of Revenue Annual Report

The 2008-2009 Louisiana Department of Revenue Annual Report has been published to LDR website.

The report presents tax collection data for the fiscal year ending June 30, 2009.

It also contains helpful information about how general fund revenues are spent. Some highlights:

  • Our children: Public schools receive 55%
  • Our families: Health & human services receive 22%
  • Our neighborhoods: Public safety programs receive 9%
  • Our colleges: Institutions of higher education receive 14%
  • Our roads: State and local road funds are supported by motor fuel tax dollars

All LDR annual reports dating back to 2001 are available electronically at revenue.louisiana.gov.

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Governor Jindal to Hold Press Conference Outlining Action to Address the Mid-Year Shortfall

Today, Governor Bobby Jindal will hold a press conference in the Governor’s 4th Floor Press Conference Room to outline action to address the state’s mid-year shortfall.

    WHO: Governor Bobby Jindal

    WHAT: Governor Jindal holds press conference outlining action to address the state’s mid-year shortfall

    WHEN: TODAY, Tuesday, December 22
    3 PM

    WHERE:

      Governor’s 4th Floor Press Conference Room
      LA State Capitol
      900 North 3rd Street
      Baton Rouge, LA

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Report: ‘Tax revenue drop causes $197M La. budget deficit’

Louisiana’s Revenue Estimating Conference forecast a sharp reduction in state revenues for the rest of this fiscal year and into the next.

From the Associated Press:

Louisiana’s revenue forecast dropped $197 million Thursday, driven by plummeting state sales taxes as shoppers shut their wallets and businesses shrink spending in the tight economy.

The state income projecting panel, the Revenue Estimating Conference, revised tax collection estimates sharply downward for the current fiscal year that ends June 30, continuing a recent trend of forecast revisions to reflect drops in tax collections.

Thursday’s changes create a deficit in the $29 billion budget that must be closed in the coming weeks.

Economist Greg Albrecht said sales tax revenue has slumped, and the uptick in severance and royalty money from oil prices isn’t enough to combat it. Albrecht, the chief economist for the Legislative Fiscal Office, said he projects a more than 14 percent decrease in sales tax collections compared to last year — and he said that could get worse.

“There’s just a massive retrenchment of spending for households and businesses,” said Albrecht, whose revenue projections were selected by the conference as the official forecast. “People just aren’t spending.”

Estimates of business tax collections also were cut, along with revenue from gambling taxes.

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New RIB explains Louisiana School Tuition & Expense Tax Deduction

The Louisiana Department of Revenue has published Revenue Information Bulletin (RIB) 09-19, which explains the set of tax deductions known collectively as the Louisiana School Tuition & Expense Tax Deduction.

There are three deductions that cover a range of expenses including private and parochial school tuition, the costs of school supplies and uniforms for public school students, and home-schooling supplies.

From RIB 09-019:

The deductions, equal to 50 percent of the actual amount paid during the tax year by the taxpayer, limited to $5,000 per dependent, must be reported on Schedule E of the Louisiana Resident Income Tax return, Form IT-540. The deductions are also allowed for Part-Year residents for school expenses paid in Louisiana during the time the taxpayer was a Louisiana resident and must be reported on the Nonresident and Part-Year Resident (NPR) Worksheet of the Nonresident and Part-Year Resident Income Tax return, Form IT-540B. The total amount of the deduction may not exceed the taxpayer’s total taxable income. When filing Form IT-540 or Form IT-540B, the Louisiana School Expense Deduction Worksheet must be attached to the return, and taxpayers must retain all expense receipts as proof of the amounts paid.

Read the full RIB, which includes helpful examples of eligible expenses, at revenue.louisiana.gov.

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