Alabama Department of Revenue Proposes Sales/Use Tax Regulations to Unify Casual Sale Rules

by: Walt Terry and Matt Mantle

The Alabama Department of Revenue (ADOR) proposed sales/use tax regulations last month to unify the various casual sale, used, and secondhand property taxation rules into one rule.  Under Alabama law, casual or isolated sales by persons not engaged in the business of selling are not required to be reported to the ADOR.  As with the current regulations, the new regulation will provide that casual sales of automotive vehicles, motorboats, truck trailers, trailers, semitrailers, travel trailers, manufactured homes, and secondhand and used property by a person engaged in the business of selling such property would be subject to sales and use taxes.  The new regulation will also continue to provide that tangible personal property purchased outside of Alabama is not subjected to Alabama’s use tax when brought into Alabama if purchased from a person not engaged in the business of selling that property.

The  new proposed regulations and related ADOR Notices of Action can be found here:

Repeal of 810-6-1-.183https://revenue.alabama.gov/wp-content/uploads/2017/05/810-6-1-.183-1.pdf

ADOR Notice of Action – http://www.alabamaadministrativecode.state.al.us/UpdatedMonthly/AAM-AUG-21/810-6-1-.183.pdf

Repeal of 810-6-1-.33 and New Rulehttps://revenue.alabama.gov/wp-content/uploads/2017/05/810-6-1-.33-1.pdf

ADOR Notice of Action – http://www.alabamaadministrativecode.state.al.us/UpdatedMonthly/AAM-AUG-21/810-6-1-.33.pdf

 

Louisiana Tax Commission Online Appeals Portal is OPEN for the Tax Year 2021

The Louisiana Tax Commission Online Appeals Portal is OPEN for the Tax Year 2021 (2022 Orleans Parish) on the LTC website.

To file an appeal:

If you you have any questions, please reach out to a member of the JW SALT Team.

Property Damage Suffered as a Result of Hurricane Ida Must be Considered by Assessors into Determining the Fair Market Value

In response to the pandemic, the Jones Walker SALT team published an article regarding La. R.S. 47:1978.1 and its mandate that property damaged, destroyed, or rendered nonoperational due to an emergency declared by the governor was subject to reassessment, including the consideration of additional obsolescence, as a result of that physical and financial damage.

In response to Hurricane Ida, Governor John Bel Edwards issued a statewide state of emergency order on August 26, 2021. As such, any property, including buildings, structures, or personal property that was damaged, destroyed, or rendered nonoperational by Ida “shall” be subject to reassessment by the assessor. In fact, the Louisiana Tax Commission (Commission) recently issued Statewide Advisory No. 03-2021 encouraging any taxpayer whose property was destroyed, damaged, or rendered nonoperational due to Ida to document all damages and submit appropriate documentation, including photographs, to their assessor.

Based on the foregoing, if any real or personal property has been damaged or rendered nonoperational because of Ida, it is recommended that for damaged properties photos be taken, and the cost of repairs be documented. For property rendered nonoperational as a result of the storm, it is prudent to document how the downtime has impacted your business. With respect to any of the foregoing, the Jones Walker SALT team can assist in identifying and gathering the appropriate data to present to the assessor.

In its statewide advisory, the Commission advises assessors in parishes affected by Ida, and where the assessment rolls have not been certified by the assessor to the local Board of Review, to advertise new exposure dates and new dates for the Board of Review to consider any appeals. If you believe that your assessment is now incorrect as a result of Ida, best practice would be to contact your assessor to provide any data to establish a necessary reduction in value based on the damage, or because business property is nonoperational, and to inquire as to whether the assessor will voluntarily change the assessment or reopen the rolls for inspection, and subsequent appeal. As noted in the article, Section 1978.1 provides certain appeal rights if the assessor refuses to properly consider data regarding the reduced value of damaged or nonoperational property.

If you have any questions or wish to discuss, please contact Jay Adams or any other member of the Jones Walker SALT team.

Louisiana Department of Revenue Grants Additional Automatic Extensions For Certain Eligible Businesses and Individuals Impacted by Hurricane Ida

The Louisiana Department of Revenue has now issued Revenue Information Bulletin (RIB) 21-024 automatically granting additional extensions to taxpayers in certain Louisiana areas impacted by Hurricane Ida for certain taxes that were due on or after August 26, 2021.

The Department’s new RIB specifically explains which taxpayers are eligible for automatic extensions, by tax type.

Eligible taxpayers include individuals and businesses whose homes, principal places of business, critical tax records, or paid tax preparers are located in one of the following parishes:

  • Ascension
  • Assumption
  • East Baton Rouge
  • East Feliciana
  • Iberia
  • Iberville
  • Jefferson
  • Lafourche
  • Livingston
  • Orleans
  • Plaquemines
  • Pointe Coupee
  • St. Bernard
  • St. Charles
  • St. Helena
  • St. James
  • St. John the Baptist
  • St. Martin
  • St. Mary
  • St. Tammany
  • Tangipahoa
  • Terrebonne
  • Washington
  • West Baton Rouge
  • West Feliciana

Automatic extensions are based on the taxpayer’s location address on file with the Department.

If, however, a taxpayer’s location address is not within one of the parishes listed in the RIB, the taxpayer may still be eligible for interest and penalty relief even though an automatic extension did not apply.

Extensions do not apply for any tax that was due before August 26, 2021.

Income and Franchise Tax Extensions

For individual income, corporation income and franchise, fiduciary income, partnership, and partnership composite tax returns with original or extended due dates on or after August 26, 2021, and before January 3, 2022, the automatic extended due date to file the return is January 3, 2022.

The original due date of income and franchise tax for all Louisiana taxpayers was previously extended to June 15, 2021 under RIB 21-007 as a result of the February Winter Storms.  Interest and penalties are imposed by statute on delinquent income and franchise tax for the 2020 tax year beginning June 16, 2021, and will continue to accrue until paid.  Eligible taxpayers are granted an extension to file only under this new RIB 21-024 for Hurricane Ida.

The Department’s new RIB, however, also provides additional specific extension information for certain taxpayers in Ascension, Calcasieu, East Baton Rouge, Iberville, and Lafayette Parishes only, who were previously granted automatic filing and payment extensions under RIB 21-015 and who filed an extension with the Department on or before August 16, 2021 (and who previously received an extension to file their return by November 15, 2021).  According to the RIB, since penalty and interest began accruing on tax due before August 26, 2021, there is no relief from penalties and interest accruing on these tax payments previously due.

Estimated Income Tax Payments

The new automatic extension also includes estimated tax payments with original due dates between August 26, 2021, and January 3, 2022.  For the majority of taxpayers, the extension applies to the third calendar quarter estimated tax payment due on September 15, 2021.

Withholding Tax Extensions

For withholding tax returns due on or after August 26, 2021, and on or before January 3, 2022, the automatic extended due date to file the return is now January 3, 2022.

Severance and Excise Tax Extensions

For severance and excise tax returns with original or extended due dates on or after August 26, 2021, and on or before January 2, 2022, the automatic extended due date to file the return is now January 3, 2022.

Appendices in RIB:

The Department’s new RIB also includes the following appendices that provide specific information regarding extensions, by tax type:

 

The Jones Walker SALT Team will continue to provide additional updates regarding Hurricane Ida relief as they are issued.

Louisiana Department of Revenue Issues Guidance on Income Tax Relief (and Notice Requirements) for Hurricane Ida Relief Work by Nonresident Businesses or Employees

The Louisiana Department of Revenue has now issued Revenue Information Bulletin (RIB) 21-020, which provides certain income tax relief (and notice requirements) relating to Hurricane Ida relief work performed in the State by nonresident businesses or employees.

Louisiana law (Act 358, 2017 Reg. Sess.) provides for an income tax exclusion from either gross income or adjusted gross income for compensation received by either anonresident business” or an “out-of-state employee” for the performance of disaster or emergency-related work relating to critical infrastructure within the state during a declared state emergency. The exclusion applies only for income received in exchange for disaster or emergency related work related to critical infrastructure that is performed during the declared disaster period, which begins within 10 days of the first day of the declaration or proclamation made by either the governor, the president, or appropriate local government official and ends 60 days after its conclusion, unless a longer period is subsequently authorized.

As a result of Governor John Bel Edwards’ declared State of Emergency for Louisiana relating to Hurricane Ida, the applicable disaster period for Hurricane Ida commences on August 26, 2021, and extends through November 26, 2021.

A “nonresident business” means a business entity whose services are requested by a “registered business” in the State or by a state or local government for purposes of performing disaster or emergency-related work in the State and that prior to the declared state of emergency, the nonresident business was not registered to do business in the State, had no employees, agents, or independent contractors in the State, was not transacting business in the State, and has not filed and is not required to file any state or local tax return in the State.  A “nonresident business” also includes a business entity that is affiliated with a registered business in the State solely through common ownership.

A “registered business” means any business entity which is registered to do business in the State of Louisiana and was registered before the declaration.

An “out-of-state employee” means a nonresident individual who does not provide services or activities in this state, except for disaster or emergency-related work during a disaster period.

The out-of-state employee will not be considered to have established residency or a presence in the State that would require the employee or his/her employer to file and pay income taxes, to be subject to tax withholdings, or to be required to file and pay any other state or local tax or fee during the disaster period. The out-of-state employee and his/her employer will also be exempt from any related state or local employer withholding and remittance obligations.

The performance of disaster or emergency-related work in the State by a nonresident business or out-of-state employee outside of the disaster period for Hurricane Ida remains subject to income tax and receives no exclusion.

Performance of disaster or emergency-related work within the declared emergency period for Hurricane Ida does not create a physical presence or nexus in Louisiana that would otherwise obligate the nonresident business or out-of-state employee to register, file, or remit any income tax otherwise due on the disaster or emergency-related income.

However, the Department also made clear in the RIB that, unless otherwise provided, nonresident businesses and out-of-state employees would remain obligated for all other tax types, including but not limited to sales tax and corporation franchise tax.

The new RIB also provides an official request from the Department to all registered businesses in the State of Louisiana who are requesting any nonresident business to perform disaster or emergency-related work relating to Hurricane Ida to provide written notice to the Department concerning all such requests.  The written notice must contain the following information:

  • The name, address, and federal tax identification number of the nonresident business;
  • The date of the request to the nonresident business to perform disaster or emergency-related work;
  • The date and declaration number of the declared state disaster or emergency;
  • A general description of the disaster or emergency-related work requested.

The written notice to the Department must include a representative’s contact information (name, phone number, and email address), be signed by an authorized officer, owner, or other official of the resident business, and be submitted on official letterhead of the resident business.

The written notice must be transmitted, as an attachment via email, to the Department at the following email address:  Act358.Notices@la.gov.

Following Hurricane Ida, Louisiana Department of Revenue Grants Automatic Filing and Payment Extensions for Tax Returns and Payments with Original or Extended Due Dates on August 31, 2021

The Louisiana Department of Revenue has now issued Revenue Information Bulletin (RIB) 21-021 automatically granting  filing and payment extensions to taxpayers for certain Louisiana tax returns and payments due during Hurricane Ida landfall and impact.  The Department’s new RIB specifically explains that for taxpayers whose homes, principal places of business, critical tax records, or paid tax preparers are located in Louisiana, tax returns and payments with original or extended due dates on August 31, 2021 will now have an automatic extended due date of September 15, 2021.

For tax returns submitted by the extended deadlines and for payments either submitted by the extended deadline or for which an installment agreement is entered into by the extended deadline, no late filing penalties, late payment penalties, or interest will be due.

Any return or tax on which penalty or interest began accruing before August 28, 2021, will not be eligible for this relief.

The Department’s RIB also provides and appendix containing the following list of severance and excise tax returns and payments normally due on August 31, 2021 (and now due on September 15, 2021):

  • International Fuel Tax Agreement (IFTA) Return
  • Severance Tax – Timber and Minerals
  • Surface Mining and Reclamation Fee

The Jones Walker SALT Team will provide additional updates regarding Hurricane Ida relief as they are issued.

Jones Walker SALT Team Members to Present at 28th Annual Paul J. Hartman State and Local Tax Forum – Register Now!

Jones Walker SALT Team members Jay Adams, Bill Backstrom, and Alysse McLoughlin will present at the 28th Annual Paul J. Hartman State & Local Tax Forum October 27-29, 2021 in Nashville, TN.

The Professor Paul J. Hartman Memorial State and Local Tax (SALT) Forum, sponsored in conjunction with the Vanderbilt University Law School, provides industry, practitioners and state revenue employees the opportunity to participate in a quality forum exploring significant national developments and trends in state and local taxation. The Forum features speakers with the knowledge, expertise, and communication skills to impart current developments as well as the practical solutions and planning opportuntities in structuring and reporting state and local tax transactions. This year’s Forum will be held in-person at the Loews Vanderbilt Hotel in Nashville, Tennessee. There will also be a virtual option available for all program sessions, likely via Zoom.

Please click here to register for the forum.

Two New Proposed Regulations Issued by the Louisiana Department of Revenue

The Louisiana Department of Revenue has now issued two new proposed regulations regarding:

  • Electronic filing and payment requirements for consolidated sales tax returns; and
  • Mandatory electronic filing requirements and electronic payment requirements relating to the Industrial Hemp-Derived CBD and Consumable Hemp Products Tax.

 

Consolidated Sales Tax Returns – Electronic Filing and Payment Requirements:

The Department is proposing to adopt rules in Louisiana Administrative Code (“LAC”) 61.III.1547 and 1548 to require electronic filing and payment requirements for “consolidated filers” who are filing the Louisiana Sales Tax Return (Form R-1029).

According to the proposed regulation, “consolidated filers” are taxpayers who are approved, according to LAC 61:I.4351(A)(1)(a), to file consolidated sales tax returns to report sales from multiple locations on one consolidated monthly return.

The purpose of the proposed regulation is to require consolidated filers to electronically file all sales tax returns and electronically submit all related sales and use tax payments.  According to the Department’s proposed regulation, recent legislative changes have required more specific tracking of sales tax revenues, and requiring consolidated filers to file returns and make payments electronically allows for targeted tracking while maintaining convenience for consolidated filers.

A copy of that proposed regulation can be found here.

 

Industrial Hemp-Derived CBD and Consumable Hemp Products Tax:

The Department is also proposing to amend LAC 61.III.1535 and 1536, regarding mandatory electronic filing and payment requirements for the Industrial Hemp-Derived CBD Tax Return.  Act 336 of the 2021 Regular Session (“Act 336”) changed the name of the tax to Consumable Hemp Products Tax and expanded its applicability.  The purpose of the new proposed regulation is to revise the terminology in the regulation consistent with the changes to the tax statutes made by Act 336.

A copy of that proposed regulation can be found here.

 

 

 

Former Barclays Capital and IRS Veteran Alysse McLoughlin Joins Jones Walker’s State & Local Tax Team

Jones Walker LLP announced today that Alysse McLoughlin has joined the firm as partner in the Tax Practice Group on the State & Local Tax (SALT) Team.

Alysse has a particular skill working with financial services companies, litigating state tax matters, and advising on tax planning opportunities.

Bill Backstrom, leader of Jones Walker’s Tax Practice Group, said, “We have known Alysse and have respected her professionalism and talent for years. We are thrilled to welcome her to our team. Her background at a multinational investment bank, a global financial services firm, and the IRS is a huge asset to our SALT team. We look forward to working with her and seeing her immediate impact in support of our clients’ interests.”

Alysse joins Jones Walker from an international law firm and previously served as head of state tax at Barclays Capital. Among other responsibilities, she established the company’s tax-return filing positions and reserves, participated in the development of financial statements and reports, consulted on the structuring of commodity transactions, and responded to audits conducted by state tax authorities. Prior to joining Barclays Capital and after leaving the Internal Revenue Service (IRS), Alysse was state tax counsel for Lehman Brothers.

“The ability to attract a nationally-recognized professional in the tax arena speaks to the caliber of our SALT team. We are pleased to have Alysse join the firm and look forward to continued strategic growth across our footprint,” added Bill Hines, managing partner of Jones Walker.

“Given Covid and the tumultuous past year and a half, clients need more professional tax support than ever to deal with states that are expected to be more creative and aggressive both in imposing taxes that are currently on the books and in enacting new taxes that will expand their tax base,” explained Alysse. “I’m delighted to join the firm alongside Jones Walker’s prominent tax team and eager to help clients navigate these ‘new world’ complexities.”

A recognized authority on state and local tax law, Alysse has been ranked in Chambers USA since 2017, among other honors. Committed to legal scholarship and education, she has served in leadership positions for a number of legal and industry organizations, including co-chairing the New York University School of Professional Studies Summer Institute on Taxation (State and Local Tax Programs) and serving on the planning/advisory committees for the Georgetown Law Advanced State and Local Tax Institute, the National Multistate Tax Symposium, the Paul J. Hartman State and Local Tax Forum, and the New York University School of Professional Studies Annual Institute on State and Local Taxation.

Alysse earned her LLM from New York University School of Law in 1997 and her JD from Fordham University in 1993.

One Bourbon, One Scotch and One Appraisal. . . It’s Time to Inspect the Property Tax Rolls!

Not that Louisiana property tax issues will make one want to imbibe, but it is that time of the year when the assessment rolls are open for review in Louisiana. The open book dates are currently published on the website of the Louisiana Tax Commission. Most of the rolls will be open the last two weeks in August for review and inspection.  Check with the individual assessor to determine if the in-person visits are permitted.  The open roll period offers a great opportunity for taxpayers to meet with the Assessor and their staffs to discuss the assessed value of any property located within that parish. Importantly, the open roll period offers taxpayers the opportunity to provide data to the Assessor regarding the fair market value of property and the taxpayer’s opinion of value. Importantly, best practices dictate that any data or evidence that a taxpayer has regarding obsolescence related to its property be provided to the Assessor during the open roll period. This will become even more important starting in 2022 when Act 343 of the 2021 Regular Session becomes effective (more on that in an upcoming post).

If after meeting with the Assessor, and providing additional data regarding fair market value and obsolescence the taxpayer still is not satisfied with the assessed value, there is no reason to cry in your beer, as the Assessor’s value can be appealed to the local Board of Review. The appropriate appeal form is on the Louisiana Tax Commission’s website, Form 3101, and must be submitted to the Board of Review no later than seven (7) prior to the public hearing set by the Board of Review.  See La. R.S. 47:1992. Luckily, the hearing dates are also mostly available on the Tax Commission’s website. It is important to note that usually the Parish Policy Jury or other parish wide body acts the Board of Review in reviewing appeals of property tax assessments. As such, ensure that your appeal documents are submitted to the Police Jury’s office and not just to the Assessor or Sheriff. The Board of Review can increase or decrease an assessment.

If the taxpayer disputes the Board of Review’s decision, an appeal maybe filed with the Louisiana Tax Commission by submitting Appeal Form 3103A within ten (10) business days after receipt of the certified mailing of the Board of Review’s written determination. Although beyond the scope of this post, it is important to keep in mind that the Tax Commission is where a taxpayer will put on additional evidence and testimony (including appraisers and other experts) in support of its opinion of fair market value for the property at issue.

If you follow best practices, and provide your Assessor with the data to support your opinion of fair market value, you will hopefully get the assessed value you seek and be “bad to the bone”!

If you have any questions regarding any of the forgoing, please contact Jay Adams.

Cheers!

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