Louisiana tax amnesty plan reaches goal

Advocate staff file photo by RICHARD ALAN HANNON -- Tim Barfield, secretary of the state Department of Revenue, said on Tuesday the state is accepting tax credits at present because his agency has no authority to refuse them. Show caption
Advocate staff file photo by RICHARD ALAN HANNON -- Tim Barfield, secretary of the state Department of Revenue, said on Tuesday the state is accepting tax credits at present because his agency has no authority to refuse them.

“There won’t be midyear cuts because of amnesty.” State rep. Joel robideaux, amnesty program’s legislative sponsor

Enough taxpayers jumped at the state’s offer of reduced interest and waived penalties in exchange for settling their tax disputes to generate $200 million needed for the state’s operating budget.

The Jindal administration announced initial calculations for the tax amnesty program Monday. Since the state Department of Revenue still is opening mail, the final tally likely will be larger.

“We expect that number to grow as we receive and process applications and payments submitted in the final days and hours of the amnesty program,” Tim Barfield, secretary of the state Department of Revenue, said in a written statement.

The tax amnesty program had its roots in Gov. Bobby Jindal’s plans to overhaul Louisiana’s tax code. He abandoned his ambitious proposal on the opening day of the legislative session. Legislators picked up the amnesty program from the ashes when they decided to rework the governor’s $25.4 billion state spending plan later in the session.

A 2010 amnesty program generated $482.7 million from more than 40,000 taxpayers. Legislators banked on the current program producing at least $200 million to pay bills in the Medicaid program, which provides health care to the poor. Achieving $200 million was crucial because the money will be used to draw down $340 million in federal dollars.

The amnesty program’s legislative sponsor, state Rep. Joel Robideaux, said he was certain the state revenue department would work hard to collect the necessary dollars.

“I’m not surprised because I wouldn’t have put the number down if I didn’t think it was achievable, but there’s always some anxiety,” Robideaux, R-Lafayette, admitted Monday afternoon. “There won’t be mid-year cuts because of amnesty.”

Even though the latest amnesty program came just three years after the previous one, the Revenue Department had millions of dollars to pursue. The Jindal administration estimated $1.4 billion was owed in back taxes from delinquent tax billings. Another $1.1 billion in taxes was tied up in litigation or disputed audits.

Half the interest charges and all penalties were waived during the two-month program that ended Friday.

Jarrod Coniglio, deputy secretary of the state Revenue Department, said applications had to be postmarked by Friday in order to qualify for amnesty. He said the department likely will continue to get payments in the mail for several days.

“We’re comfortable with saying we’ve reached the target,” Coniglio said.

As with the last amnesty program, the big payments came in toward the end from corporations with complicated legal issues. Business officials weighed the costs of writing a check versus continuing to pay attorneys to haggle over taxes.

The Revenue Department handled most of the program in-house — building a website, processing payments and mailing notifications. A private collection agency was hired to make phone calls. Coniglio said the department still is tallying the administrative costs.

What happens with any money collected above $200 million is unclear. The dollars go into the 2013 Amnesty Collections Fund, from which they will be available for appropriation by legislators.

“The Department of Revenue’s really just here to collect it and administer it,” Coniglio said.

The amnesty legislation staggered the program over three years:

  • For two months this year, half the interest and all penalties were waived.
  • For one month in 2014, 15 percent of penalties will be waived.
  • For one month in 2015, 10 percent of penalties will be waived.