BATON ROUGE - The Louisiana Department of Revenue (LDR) will begin accepting 2016 state individual income tax returns on Monday, January 23, the same date that the IRS begins accepting federal returns. On that date, LDR will begin accepting returns filed electronically at www.revenue.louisiana.gov/fileonline and through third-party commercial software, along with paper returns submitted in person and through the mail.   Also on January 23, taxpayers can begin downloading paper tax forms from the LDR website, but all taxpayers are encouraged to file electronically for the fastest, most error-free return processing.   The state individual income tax filing deadline is Monday, May 15.   LDR begins this tax season with a focus on protecting taxpayers and state government against fraud.   Over the past three years, LDR has saved taxpayers more than $50 million through its tax fraud prevention initiative, with millions more recovered through restitution. Dozens of fraud suspects have been arrested.   The enhanced security measures in place to detect and stop fraud have increased the time it takes to process tax refunds. For returns filed electronically, refund processing could take as long as 60 days in some cases. Some taxpayers filing paper returns could wait as long as 14 weeks for their refunds.   Additional and unnecessary refund delays can be expected if taxpayers fail to keep their most current contact information on file with LDR, including name, address and telephone number. Taxpayers who have moved in the past year, including those displaced by the 2016 floods, should visit www.revenue.louisiana.gov/addresschange.   Tips for Taxpayers   LDR recommends the following steps to ensure the fastest, most accurate tax return and refund processing:   File electronically – The expected refund processing time for returns filed electronically is up to 60 days; for paper returns, expect to wait 12 to 14 weeks.   Taxpayers should update personal information if their name or address changed during the tax year.   Double-check return information – Ensure that all Social Security numbers and tax computations are correct, and that all names and Social Security numbers are in the same order as previous years. Math errors and incorrect tax-table information are leading causes of delayed refunds.   Include all supporting information such as W-2s; use paperclips, not staples, if filing a paper return.   Apply for extensions in a timely manner – Extension requests must be filed electronically no later than the May 15 income tax filing deadline.   If additional tax is due, include the remittance coupon to ensure proper payment posting.   Make checks or money orders payable to the Louisiana Department of Revenue; do not send cash.   If filing a paper return, attach the proper label to the mailing envelope.   Basic tips for ensuring a proper return filed by a reputable tax preparer:   Try to find a preparer who will be around to answer questions after the return has been filed.   Avoid preparers who base their fee on a percentage of the amount of the refund or who claim they can obtain larger refunds than other preparers without first reviewing your returns.   Review and ask questions before signing a return.   Ask others that you know who have used that preparer if they were satisfied with the services that they received.   Ask any preparer that you are considering for references.   Ask and verify if the preparer belongs to a professional organization that requires its members to pursue continuing education and also holds them accountable to a code of ethics.   Always question entries on your return that you don’t understand.   Never sign a blank return.   Insist that the preparer sign the return and provide his appropriate information on the return.   The preparer should meet with the taxpayer and go over the return before it is filed.   Taxpayers should be provided a copy of their return before it is filed.   Pay attention to media reports of persons who have been convicted of tax fraud.   Taxpayers should be aware that the information that they provide to their preparer could be used to commit identity theft by an unscrupulous preparer.

 

BATON ROUGE – Louisiana’s tax system would be simplified with lower rates, fewer exemptions and a broader revenue base under recommendations from the task force charged with developing a more stable funding model for state government.

The Task Force on Structural Changes in Budget and Tax Policy presented its final recommendations to the state legislature on Tuesday. The task force emphasizes that an effective tax structure should be fair, simple, and stable in the long term.

"Louisiana’s tax system should be easy to comply with and should be competitive with other states,” said task force co-chair and Secretary of Revenue Kimberly Lewis Robinson. “And there should be minimal exceptions, so we are advising lawmakers to address a multitude of exemptions, deductions and credits that have multiplied over the years.”

The task force’s recommendations focus on the budget, as well as sales, individual income, corporate income and franchise, and property taxes.

“We recommend implementing this full package as a comprehensive solution to stabilize the state’s finances,” said task force co-chair Jim Richardson, who serves also as chair of the state Revenue Estimating Conference. “A piecemeal approach will fall short of that goal.”

Budget

Recommendations include implementing and adhering to improved revenue forecasting, particularly with regard to the MFP, Medicaid and TOPS; and continuing the ongoing review of state contracts to identify opportunities for consolidation, renegotiation or elimination.

Sales Tax

Recommendations include reducing the state sales tax rate to no more than 4 percent; expanding the state sales tax base to include non-residential utilities and certain services currently taxed in Texas and other states; and retaining eliminations of exemptions made by the Legislature earlier this year.

Individual Income

The task force recommends two options for individual income tax changes.

One, a constitutional amendment repealing the state deduction for federal income taxes paid, would expand the tax base, narrow the brackets and  lower all individual income tax rates by 25 percent:

• 1.5 percent on the first $25,000 for couples ($12,500 single);
• 3 percent on $25,001 through $50,000; and
• 4.5 percent above $50,00

The second option, a statutory change removing the excess itemized deduction, would use the new three-bracket structure, but would leave the rates at 2%, 4% and 6%.

Various exemptions would be eliminated or allowed to expire.

Corporate Income

Corporate income tax recommendations include support for eliminating the state corporate income tax deduction for federal income tax, a constitutional amendment (Amendment 3 on the Nov. 8, 2016, election ballot). If passed, the amendment would also trigger a simpler, flat corporate income tax rate of 6.5 percent that would be more stable than the current graduated rate which ranges from 4 to 8 percent.

Property Tax

Recommendations include amending the state constitution to allow for the gradual, ten-year phase out of locally assessed ad valorem taxes on inventory.

The task force also recommends elimination over a five-year period of the state income and franchise tax credit for ad valorem taxes paid on inventory.

 

The full set of recommendations is available at www.revenue.louisiana.gov/taskforce.

 

BATON ROUGE - A task force reviewing state tax policy is backing a proposed constitutional amendment that would alter Louisiana’s corporate tax structure.

The Nov. 8 ballot measure is Constitutional Amendment No. 3, which would eliminate a major corporate income tax deduction for federal taxes paid. Its passage would trigger implementation of a new law establishing a lower, flat corporate income tax rate. The current graduated state corporate income tax rate ranges from 4 to 8 percent. It would be replaced by a 6.5 percent across-the-board rate.

“The constitutional amendment, along with task force recommendations that will be released next week, will move Louisiana toward a more fair, simple and broad-based tax structure,” said Secretary of Revenue Kimberly Robinson, co-chair of the Task Force on Structural Changes in Budget and Tax Policy.

 

The proposed constitutional change would also decouple Louisiana’s tax base from federal tax changes, creating a more stable Louisiana tax structure, Robinson said.

 

The task force decided Wednesday to make its position on the ballot proposition known since early voting is underway.