SALT Report 1601 – A paper mill’s request for a refund of $613,642.97 in overpaid use taxes on its purchases of sodium based raw materials used in the paper-making process was denied by the Louisiana Court of Appeals.
There are very specific refund guidelines set forth in La SR A157F 47. The regulation requires that the taxpayer protesting the over-payment of any tax must first remit the amount due while at the same time give notice of their intent to file suit to recover the erroneously paid taxes. And La SR 2A1576 47 requires that upon receipt of the taxpayer’s notice of its intent to file suit, the amount remitted must be placed in an escrow account which will be held for a period of thirty days. Once the suit has been filed, any funds in the escrow account will be held in escrow pending the outcome of the suit.
However, nothing in the court’s records indicate that on the date the taxpayer remitted the amount due it gave notice of its intent to file a suit to recover the taxes paid. Furthermore, the taxpayer’s suit seeking a refund of the overpayment of taxes was not filed until after the three-year limitations period expired.
Therefore the Court of Appeal, First Circuit, dismissed the use tax refund because:
1)The taxpayer did not give notice to the tax collector of its intention to file a suit for recovery of the taxes paid when it remitted the amount due, and
2)The taxpayer did not file suit before the statute of limitations expired
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