47: Arbitrary assessments prohibited Effective date July 8, 2010

 The Arbitrary Assessment bill  I prefer to use the term “estimated’ not arbitrary.  The purpose of the bill was to prohibit assessments at year end without an audit being completed in order to stop prescription of the tax from occurring.  It provides for the taxpayer to collect court costs and will not stop prescription of tax if the collector does not follow the proper procedures.

 Can you still file an Estimated Assessment?  YES  When can you file an Estimated Assessment?  * 47:337.48(A) Determination and notice of tax due (failure to file)  The taxpayer fails to file a tax return. The collector shall determine the amount of tax, interest and penalty due by estimate or otherwise.

 * 47: Assessment and notice when tax is in jeopardy  47:337.53(A) If the collector finds that a taxpayer designs quickly to depart from the taxing jurisdiction, or to remove property subject to any tax or any lien for a tax, or to discontinue business, or do any other act tending to prejudice or render wholly or partly ineffectual any proceedings that might be instituted to collect such tax…

 * 47: Collectors duty to determine correct tax  After the taxpayer records have been audited, it remains allowable to estimated the tax due by projecting the audit findings or by the use of sampling.

 * 47: Dealers required to keep records  If the collector requests and the taxpayer does not provide the collector with the tax records required by the statute, then the collector may prepare an estimated assessment against the taxpayer.

 * 47: Power to examine records and premises of taxpayer  If requested by the collector, the taxpayer must provide business records to the collector or his designee (auditor). Failure to provide records by taxpayer allows the collector to estimate the tax due with an assessment.

 What if the collector violates the provisions of the law?  1. The taxpayer must prove the collector is not in compliance with the law in court.  2. If the court determines the assessment to be arbitrary, then prescription will not be interrupted. Also, the dealer shall be reimbursed by the collector for the cost of litigation. (not to exceed 10% of tax, pen, int)

 Summary  Except for the provisions in the new law, the collector may not make an arbitrary assessment at year end to stop prescription of the tax.  If an audit has been performed, the assessment is not arbitrary (or estimated), but the collector must issue a proposed assessment and then a final assessment to stop prescription before year end.

 Questions?

24:513(B) Requires footnote disclosure on financial statement. Effective date January 1, 2011

 Law applies to all collectors collecting for other jurisdictions.  Requires a new footnote to the collector’s annual financial statements.  Requires a schedule disclosing total collections and a schedule of distributions by taxing authority.  Collector must distribute the report to the Legislative Auditor and to each taxing authority.

 Effective date is for fiscal periods beginning after December 31, Reports shall be completed within six months of the close of the fiscal year.  Provides that fines for violating the provisions are $1000 and violators are deemed guilty of malfeasance in office.

 Example of the footnote schedule for 2009 Sales Tax Collections: City-Parish$153,933,776 EBRP School Bd 142,878,072 EBRP Sewer Fund 36,324,145 City-Parish Street Impr 34,034,539 Baker Street Impr 553,906 Zachary Street Impr 1,066,962 Central Street Impr 669,736 City of Baker 3,605,880 Baker School District 2,829,389 City of Zachary 5,833,272 Zachary School Distr 7,216,298 City of Central 4,203,228 Central School Distr 4,864,191 Total Sales Tax Collections$398,013,394 Other Tax Collections: Hotel-Motel Tax$ 4,457,627 TIF District Tax 970,821 Public Utility Tax 22,192,193 Occupational License Tax 10,511,717 Insurance Premium Tax 3,550,405 Gaming Admissions Fees 7,555,129 Total Other Tax Collections$49,237,892 Note: All collections within a month are distributed to the proper jurisdiction by the 10 th of the following month.

 A copy of this presentation may be found on the LATA website. To print a copy of this presentation go to