Louisiana – Sales Tax Assessment Affirmed for Failing to Respond

2/26/2013

SALT Report 2191 – The Louisiana Court of Appeals affirmed a sales tax assessment against two Taxpayers who sold, leased, and repaired equipment. In this case, the Washington Parish Sherriff’s Office (WPSO) conducted an audit of the Taxpayers and determined that they did not charge and collect sales and use tax on their taxable sales, leases, and repairs in Washington Parish.  As required by Louisiana law the Taxpayers were held liable for the taxes they failed to charge, collect, and remit along with penalties and interest.

The WPSO filed a “30 day notice of intent to assess additional tax due” in the amount of $89,000. The Taxpayers did not respond to the notice or pay the assessed amount within the allotted time. The WPSO then sent a revised notice of assessment to the Taxpayers advising them of the amount owed and the remedies available to them as taxpayers and dealers. The revised notice went beyond the statutory requirement as it also advised the Taxpayers of the alternative remedies available to dealers who pay under protest.

However, the Taxpayers, again, failed to respond and did not avail themselves of the remedies available to them.  As a result, once the 60-day period expired with no protest or payment, the revised assessment became final and was the equivalent of a final and enforceable judgment.   At this point, the WPSO filed an injunction against the Taxpayers that barred them from conducting business in the Parish until full payment had been made. The Taxpayers filed an appeal stating that the revised notice of assessment did not comply with the statutory requirements set forth in La RS 47337 51A and therefore was invalid and void.

Upon review of the case, the Court determined that the evidence submitted by the WPSO satisfied its burden of proving that they had properly notified the Taxpayers of the assessment and of the remedies available to them. Further, the Court found no merit to the Taxpayers’ argument that the revised notice of assessment was deficient. Accordingly, the Court upheld the original sales tax assessment and required that the Taxpayers reimburse the WPSO for the cost of the appeal.

For Further Information

Court of Appeal of Louisiana, First Circuit – Case Numbers 2012 CA 0024 and 2012 CA 0025