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S.A.L.T. Select Developments: Louisiana

Baker Donelson's S.A.L.T. Select Developments will identify important state and local tax developments from Louisiana.

Overview

State and local taxes impact almost every taxpayer. S.A.L.T developments in any one jurisdiction can be frequent and sometimes confusing. Where multiple jurisdictions are involved, staying current with state and local tax developments can be overwhelming for any taxpayer.

To assist you with staying current on a periodic basis, Baker Donelson's S.A.L.T. Select Developments will identify one or more recent state and local tax developments from Louisiana.

October 2019

Income Tax: The Louisiana Department of Revenue has issued guidance on how changes to Internal Revenue Code Section 951A under the Tax Cuts and Jobs Act will affect Louisiana state income tax. Louisiana Revenue Information Bulletin No. 19-016, 10/08/2019. Click here for the full bulletin.

Practice and Procedure: On October 12, 2019, Louisiana voters approved Proposed Constitutional Amendment No. 3, thus making Act 675 of the Louisiana Legislature, effective January 1, 2019, operative. This legislation authorizes the Louisiana Board of Tax Appeals (BTA) to determine the constitutionality of a statute or ordinance, authorizes the BTA to provide taxpayers with legal remedies in tax cases involving the alleged violation of an Act of Congress, the U.S. Constitution or the Louisiana Constitution. The legislation also extends the BTA's jurisdiction to petitions for declaratory judgments on the constitutionality of state and local laws and the validity of regulations except for those within the Louisiana Tax Commission's jurisdiction.

August 2019

Document Filing Requirements: In the coming months, taxpayers will be able to electronically sign and submit certain forms directly to the Louisiana Department of Revenue including (1) Form R-20128 (Request for Waiver of Penalty for Delinquency); (2) Form R-20131 (Request for Abatement of Interest); (3) Form R-7004 (Tax Information Disclosure Authorization); (4) Form R-7006 (Power of Attorney and Declaration of Representative); (5) Form R-19026 (Installment Request for Individual Income); and (6) Agreements to Suspend Prescription. Louisiana Revenue Information Bulletin No. 19-014, 07/31/2019.

Sales and Use Tax: In Lafayette General Medical Center, Inc. v. Robinson, the Louisiana Third Circuit Court of Appeal held that the Louisiana Department of Revenue could not impose sales tax on a medical center's sales of medical devices. The Court interpreted the Louisiana Constitution's prohibition on the taxation of prescription drug sales to extend to the sale of medical devices. The Court reasoned that although the issue as to whether "prescription drugs" extends to "medical devices" is not entirely clear, it must apply the interpretation that is most favorable to the taxpayer. Lafayette General Medical Center, Inc. v. Robinson, La. Ct. App., 3rd Cir., Dkt. No. 18-879, 08/14/2019.

July 2019

Sales Tax: On July 2, a Louisiana District Court ruled that Harrah's should be paying state sales taxes on complimentary and discounted hotel rooms provided to its casino patrons. The Louisiana Department of Revenue has paused its audits of other casinos awaiting the outcome of its case against Harrah's. If the Department ultimately prevails in its cases against the casinos where tens of millions of dollars of sales taxes are at stake, what does this mean for countless other businesses that give away otherwise taxable goods and services at no charge as a marketing strategy for generating business? The Department is facing challenges based on the fact that these transactions do not contain the statutorily required elements of a taxable transaction including, among others, a sales price. Also, constitutionally, can the Department pursue the tens of millions of dollars in sales taxes allegedly owed by the casinos on these transactions but turn a blind eye to every other business that offers complimentary goods and services as a means of generating customer goodwill?

June 2019

Rental Tax/New Appeal Procedures: On June 6, 2019, the Louisiana Legislature's 2019 Regular Session ended. During that Session, the Legislature authorized the City of New Orleans, subject to a vote of the City's electorate, to tax rentals of residential dwellings with a duration of occupancy of less than 30 consecutive days; and proposed a jurisdictional expansion of the Board of Tax Appeals to include constitutional challenges to state and local taxes, which proposal will be put to a vote of the State's electorate on October 12, 2019.

For more information about state and local tax developments in Louisiana, please contact:

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