Tax Facts Index

Refund of sales tax paid on bad debts

The Sales and Use Tax Ordinance provides dealers with a method of claiming refunds of sales tax relative to bad debts. The sales tax is refundable only on those bad debts that are the result of credit or deferred payment sales of tangible personal property and sales of services financed by the dealer making the sale. Pursuant to Louisiana Revised Statutes 47:315 (B), to qualify for a refund the dealer shall provide documentation that:

1. The debt was incurred after September 3, 1989.

2. The debt was deducted on a Federal Income Tax return in accordance with Section 166 of the United States Internal Revenue Code.

3. The Louisiana Department of Revenue and Taxation has approved a refund of the applicable state sales tax on the same transaction.

Dealers must apply for this refund. Deduction for bad debt losses may not be taken on sales tax returns. Since refunds of this nature are contingent upon a deduction on the annual Federal Income Tax return, the Revenue Division will process one refund per year for each dealer.

How important is a postmark date?

The Revenue Division computer system uses the U.S. Post Office postmark on the envelope in determining whether a return is current or delinquent. The due date for all registered filers is the 1st of the month in which the tax is due. A return is considered delinquent after the 20th of the same month (See Tax Facts, March 1991, October 1993 and October 1995). If the 20th falls on a weekend or holiday, the return must be postmarked by the next work day. Any taxpayer whose return is postmarked after the delinquent date will receive a notice of additional tax, penalty and interest due. The return will be considered as a partial payment, and the taxpayer will receive delinquent notices until final remittance is made.

The U.S. Post Office postmark is used to enforce the assessment of penalty and interest and the loss of vendor's compensation. It is the responsibility of each dealer to ensure that sales/use taxes are transmitted in a timely manner. Additionally, dealers should be aware that giving their return to their route postal worker on the 20th could result in a delinquent return because the envelope is not postmarked until the next day. To avoid this situation, all taxpayers are urged to mail early to ensure that their returns are recognized as filed timely.

For taxpayer reference and convenience, tax due and delinquent dates for the current quarter are published in each issue of Tax Facts.

1998 Occupational License renewals

Businesses are reminded that their 1998 Occupational License renewals were placed in the mail in December. Any unpaid licenses after February 28, 1998, will be deemed delinquent and subject to penalty and interest. Penalty at the rate of 5% per month, or fractional part thereof, not to exceed 25% and interest at the rate of 1.25% per month, or fractional part thereof, will be computed from the first day of March and will increase on the first day of each succeeding month. Please file renewals timely.

Sales tax due dates

Following are the sales tax due dates for the first quarter of 1998:

Returns bearing a U.S. postmark on or after the above delinquent dates will be assessed penalty, interest and loss of vendor's compensation. Remember to mail your return early.

Taxpayer topics

Tax Facts is issued quarterly by the Department of Finance/Revenue Division to provide information concerning developments and policies regarding the collection of local sales tax within East Baton Rouge Parish.

The Revenue Division invites any suggestions, questions or comments that you would like addressed in future issues of Tax Facts. Please address these items to:

City of Baton Rouge
Department of Finance
P. O. Box 2590
Baton Rouge, Louisiana 70821-2590

ATTENTION:
Steve Thomas
Assistant Revenue Manager

Need help?

Taxpayers may call the Revenue Division to receive assistance at the following telephone numbers between the hours of 8 a.m. and 5 p.m., Monday - Friday.