Louisiana’s Uniform Local Sales Tax Board (“ULSTB”) has now issued its adopted regulation at Louisiana Administrative Code (“LAC”) 72:I.105 (“Voluntary Disclosure Agreements”) regarding a uniform voluntary disclosure program and corresponding uniform voluntary disclosure agreement (VDA) for Louisiana local sales and use tax purposes. The final, adopted regulation contains the same language as the prior proposed regulation that was issued by the ULSTB on November 29, 2018.
A copy of the adopted regulation can be found here (March 2019 Louisiana Register – see p. 440):
As required by statute (see La. R.S. 47:337.102(F)), the ULSTB has promulgated this regulation to establish a uniform voluntary disclosure program and corresponding VDA for taxpayers seeking relief from penalties in cases where a liability to more than one local sales and use tax collector is owed.
Taxpayers may apply for a VDA with the ULSTB anonymously, if they wish.
Pursuant to the adopted regulation, an undisclosed liability will qualify for a VDA if it results from the underpayment or non-payment of sales tax due to an error in the:
- mathematical computation of the tax due on the return;
- interpretation of the law; or
- process of reporting the tax due on the return.
- An undisclosed liability also qualifies if it resulted from the merger or acquisition of a company that previously failed to properly report sales and use taxes to a collector.
An “error in the mathematical computation of the tax due on the return” is an error on the part of the taxpayer in mathematical computation on the face of the return or on any of the supporting documents or the unintentional failure to include all amounts necessary for calculating the correct amount of taxes due on the return.
An “error in the interpretation of the law” is a construction of the law on the part of the taxpayer contrary to the collector’s construction of the law that caused the applicant to incorrectly determine that no tax or a smaller amount of tax was due.
An “error in the process of reporting the tax due on the return” is an error, omission, or a mistake of fact of consequence to the determination of the tax liability on the part of the taxpayer.
However, pursuant to the regulation, an applicant shall be considered to fail to comply with the requirements for a VDA under any the following conditions:
- The applicant is registered as a dealer that is required to report retail sales or sales at retail, as defined in R.S. 47:301(10), to the collector on the application date and the undisclosed liability results from the applicant’s failure to file returns for a local sales tax.
- The undisclosed liability results from the filing of false, fraudulent, or grossly incorrect returns and the circumstances indicate that the taxpayer had intent to defraud the local taxing authority of the tax due under a local ordinance or the Uniform Local Sales Use Tax Code (the “ULSTC”) (La. R.S. 47:337.1, et seq.).
- The applicant has been contacted by the collector to inquire about a tax matter, including but not limited to nexus, a potential tax liability or an audit of the taxpayer’s records provided such contact occurred in writing and prior to the application date of the agreement.
- The applicant is affiliated, as defined by law, with an entity that has been contacted by the collector for the purpose of performing an audit. However, an applicant shall be considered in compliance with the requirements of the voluntary disclosure program after the audit of the affiliated entity has been completed, provided the undisclosed liability otherwise qualifies for the VDA (as described above) and the applicant does not otherwise fail to qualify for the VDA (as described in the bullets immediately above).
The adopted regulation also provides additional detailed information regarding:
- the VDA Application and the ULSTB’s evaluation of offer to enter into a VDA.
- the determination of the applicable “look-back period” and treatment of periods prior to the look-back period.
- post-approval procedures and conditions.
- the procedure for payment of the tax, interest, and penalty due (however, under the adopted regulation, once full payment of tax and interest has been received, the collector shall waive any delinquent penalty due).
As part of this VDA program, the ULSTB has also set up a separate online “Agreement for Voluntary Disclosure of Local Sales and Use Taxes,” which can be found here:
This online form Agreement can be completed by the taxpayer and submitted online to the ULSTB for review and distribution to the relevant local sales/use tax collectors.