Processing Matters ~Credits & Refunds ~ 2013 LCPA-LDR Liaison Meeting January 17, 2013 Dawn Bankston, LDR Office Audit Division

Credits & Refunds Agenda topics Documentation for Credits January 17, 2013 Credits & Refunds Agenda topics Documentation for Credits Refund Turnaround Time Movie Credits

Documentation for Credits January 17, 2013 Documentation for Credits Instruction booklets provide documentation requirements for credits. No significant changes for 2012 tax period Requests listed on agenda: Composite Returns e.g., Ad Valorem (Inventory & Vessels) Citizen’s Assessment Alternative Fuel Historic Rehabilitation Credits This information constitutes "informal advice" as contemplated by LA Administrative Code 61:III.101.D.3.

Documentation for Credits January 17, 2013 Documentation for Credits Composite Returns Credits cannot be claimed on a composite return until tax period 2013 Ad Valorem Tax Credit – Inventory Form R-10610 “Schedule of Ad Valorem Tax Credit Claimed by Manufacturers, Distributors, and Retailers” Attach tax assessments & cancelled checks for first 3 years claiming the credit Ad Valorem Tax Credit – Vessels For Offshore Vessels, submit a schedule similar to R-10610 This information constitutes "informal advice" as contemplated by LA Administrative Code 61:III.101.D.3.

Documentation for Credits January 17, 2013 Documentation for Credits Citizen’s Assessment Declaration page(s) showing the Citizen’s assessment. Claim once per tax period on IT-540 or IT-540-INS, not both. For corporate income, CIFT-620 or CIFT-620-INS not both. Alternative Fuel Conversion vehicle – registration certificate, receipts for purchase & installation New vehicle – registration certificate, bill of sale Fueling station - invoices for equipment Citizens – multiple C This information constitutes "informal advice" as contemplated by LA Administrative Code 61:III.101.D.3.

Documentation for Credits January 17, 2013 Documentation for Credits Historic Rehabilitation Credits Historic Preservation Certification Application “Request for Certification of Completed Work Part 3” Transfer notice with copy of certification (“Part 3” application) RS 47:6019(A)3 defines information and rules for transferring Transferors and transferees shall submit to the state historic preservation office and to the Department of Revenue in writing a notification of any transfer or sale of tax credits within thirty days after the transfer or sale of such tax credits. The notification shall include the transferor's tax credit balance prior to transfer, the credit identification number assigned by the state historic preservation office, the remaining balance after transfer, all federal and Louisiana tax identification numbers for both transferor and transferee, the date of transfer, the amount transferred, and any other information required by the state historic preservation office or the Department of Revenue. A schedule showing the current or remaining tax credit balance and the amount to be claimed against the owner’s current year tax liability. This information constitutes "informal advice" as contemplated by LA Administrative Code 61:III.101.D.3.

Refund Turnaround Time January 17, 2013 Refund Turnaround Time Individual Income Tax Refund Turnaround FYE12 20 day average turnaround for electronic returns 36 day average for all returns Business Tax Refund Turnaround FYE12 61% of all business tax refunds issued within 60 days Average turnaround time varies greatly by tax type, source of refund and dollar amount

Movie Credits Agenda Requests: January 17, 2013 Movie Credits Agenda Requests: Penalty and Interest Calculation for Movie Credit Purchases. Assessment of Penalty & Interest: (1) purchase date or (2) acknowledgement of credits. La. R.S. 47:1675(H) Transferable Credits Credits acquired through transfer can be applied to any outstanding income tax liability and any related penalty & interest. Revenue Ruling 06-016 FAQs Concerning Motion Picture Investor Tax Credit Page 6 provides guidance on “Application of the Credits” This information constitutes "informal advice" as contemplated by LA Administrative Code 61:III.101.D.3.

January 17, 2013 Movie Credits RR 06-16 Application of transferrable credits in hands of purchaser/transferee: Can a return be amended to apply newly acquired credits to a previous tax year if the income tax from that year is not currently due? No, purchased credits cannot be used to eliminate a tax liability from a previous year that has already been satisfied or is not currently due. A taxpayer cannot amend a previous year return, apply newly acquired credits and generate a refund with interest. This information constitutes "informal advice" as contemplated by LA Administrative Code 61:III.101.D.3.

January 17, 2013 Movie Credits RR 06-16 Application of transferrable credits in hands of purchaser/transferee: Can a return be amended to apply newly acquired credits to a previous tax year if an income tax liability is still outstanding from a previous year? Yes, purchased credits can be applied to any income tax liability that is outstanding subject to carry-forward limits. Penalties and interest continue to accrue until the taxes on which such penalties and interest are accruing are paid. The purchased credits will be applied as a payment, not an offset of tax on the tax return. The effective date of the payment will be the same day that LDR receives the amended return claiming the credits or other written notification requesting that the credits be applied to the outstanding liability. This information constitutes "informal advice" as contemplated by LA Administrative Code 61:III.101.D.3.

January 17, 2013 Movie Credits RR 06-16 Application of transferrable credits in hands of purchaser/transferee: Can a purchased credit be used to eliminate any penalties and interest on overdue income tax liabilities from previous years? No, purchased credits cannot be used to eliminate any penalties and interest on overdue income taxes from prior years. The purchased credits can be applied to penalties and interest. Penalties and interest will continue to accrue until the taxes on which such penalties and interest are accruing are paid. The purchased credits will be applied as a payment, not an offset of tax on the tax return. The effective date of the payment will be the same day that LDR receives the amended return claiming the credits or other written notification requesting that the credits be applied to the outstanding liability. This information constitutes "informal advice" as contemplated by LA Administrative Code 61:III.101.D.3.

January 17, 2013 Movie Credits Application of transferrable credits in hands of purchaser/transferee dawn’s write-in, not in RR 06-016 Can a taxpayer claim credits that have not yet been purchased? Credits must be purchased prior to the later of (1) due date of the tax or (2) filing the return. Credits purchased after the later of these dates will be applied as a payment with an effective date of the credit purchase date. Ex1: File 4/15 with credits, purchase credits 5/1, tax due 5/15 = OK Ex2: File 5/15 with credits, purchase credits 6/1, tax due 5/15 = credit applied as payment with effective date of 6/1. In this case interest and penalty would be assessed from 5/15 – 6/1. This information constitutes "informal advice" as contemplated by LA Administrative Code 61:III.101.D.3.

Submitting Documentation for E-Filed Returns January 17, 2013 Submitting Documentation for E-Filed Returns Fax return attachments to LDR E-Return attachment fax number. fax (225) 231-6221 Include taxpayer’s name, account number, and tax filing period on the top of the first page of the fax. Send separate fax for each taxpayer. An electronic image of the fax will be stored to the taxpayer’s account.