2023 Louisiana Laws › Revised Statutes › Title 47 - Revenue and Taxation › §47:337.26. Contracts for purposes relating to collection of sales and use taxes

RS 47:337.26 - Contracts for purposes relating to collection of sales and use taxes
A. Within the limits provided for in Article VII, Section 3(B) of the Constitution of Louisiana, the governing authority of any taxing authority may contract with the sheriff, the Louisiana Department of Revenue, any political subdivision of this state, or any other agency, whether public or private, for the examination or investigation of the place of business, if any; the tangible personal property; and the books, records, papers, vouchers, accounts, and documents of any taxpayer for the purposes of enforcement and collection of any tax imposed by that taxing authority.
B. Within the limits provided for in Article VII, Section 3(B) of the Constitution of Louisiana, for the purpose of auditing for compliance with local sales and use tax ordinances, any taxing authority or other entity which collects local sales and use taxes may enter into a contract with a private auditing firm and, when so authorized by such contract, such firm may examine or investigate the place of business, if any; the tangible personal property; and the books, records, papers, vouchers, accounts, and documents of any taxpayer. The rate of compensation shall be on an hourly basis, plus reasonable expenses. In addition, all such contracts shall be approved by the majority of the affected taxing authorities.
C.(1) Any private agency or auditing firm hired for the purposes of this Section and any employee, contractor, or other agent of such private agency or auditing firm shall be governed by the provisions of R.S. 47:1508 et seq.
(2)(a) Audit leads provided by the private agency or auditing firm shall be subject to the taxpayer confidentiality requirements of R.S. 47:1508 et seq. Once confidential information has been disclosed by the taxpayer to the private agency or auditing firm, audit leads by such private agency or auditing firm to other local collectors are strictly prohibited under the taxpayer confidentiality requirements of R.S. 47:1508 et seq; however, the taxpayer may voluntarily waive confidentiality requirements in writing, authorizing the examination or audit to be expanded to include additional tax collectors.
(b) Information provided by the private agency or auditing firm to the local collector may be shared by the local collector with other collectors which maintain written reciprocal exchange agreements in accordance with R.S. 47:1508(B)(5).
(3) Notwithstanding any provision of this Section to the contrary, a private agency or auditing firm shall limit its activities to auditing the books and records of the taxpayer and shall not perform any assessment or collection functions, except as otherwise expressly permitted by law.
(4) A lead auditor of a private agency or auditing firm performing an examination or audit function shall possess or have attained any of the following:
(a) An active certified public accountant license.
(b) A bachelor's degree with a minimum of eighteen hours of accounting.
(c) An active certified tax examiner's certificate issued by the Louisiana Association of Tax Administrators.
(d) A minimum of six years' experience in the field of state or local sales and use tax.
D.(1) Prior to initiating an examination or audit of a taxpayer, the local collector shall provide notice of the intent to audit which shall be sent by certified mail to the taxpayer at the taxpayer's last known address. Such notice shall:
(a) Reasonably describe the nature of the audit.
(b) Identify the name, office, address, and office telephone number of the firm or individual who will initiate the audit.
(c)(i) Advise the taxpayer of the right to review and copy the audit contract if the audit will be conducted by a private auditing firm.
(ii) If the audit is conducted by a private auditing firm, the notice shall also advise the taxpayer whether the payment of compensation to the private auditing firm is contingent upon the actual collection of tax or in any other way dependent on the outcome of the audit.
(d) Summarize the remedies available to the taxpayer if the taxpayer should choose to contest the audit findings.
(e) Describe the interest, penalties, and costs, including audit costs, for which the taxpayer may be liable if taxes are determined to be due.
(f) Beginning July 1, 2023, advise the taxpayer that the taxpayer may request a multi-parish audit pursuant to R.S. 47:337.102.
(2) During the course of the audit, the taxpayer shall be notified of the name, office address, and office telephone number of each auditor assigned to the audit. Private auditing firms shall provide any taxpayer subject to an audit with access to an original or a copy of the audit contract specifying the terms under which the audit firm was engaged, which may be reviewed and copied by the taxpayer.
(3)(a) Upon completion of the audit or examination, all original information obtained by the private agency or auditing firm from the taxpayer in connection with the audit or examination, whether written or in electronic form, shall be returned to the taxpayer, and the private agency or auditing firm shall not retain any copies of such information. All taxpayer related information derived, compiled, or generated by the private agency or auditing firm in any form whatsoever, including audit schedules, working papers, and copies of information received from the taxpayer, shall be delivered to the tax collector, except to the extent such information may be retained by certified public accountants in accordance with the Louisiana Accountancy Act.
(b) No provision of this Section shall prohibit a private agency or auditing firm from retaining books and records of a taxpayer until the termination of any legal proceedings related to the audit or examination.
(c) The tax collector and the private agency or auditing firm may enter into a written agreement in accordance with this Subparagraph, authorizing such private agency or auditing firm to act as agent for the storage and safekeeping of documents otherwise required to be maintained by the tax collector. Such documents shall be maintained in accordance with R.S. 47:1508 et seq.
E. If the cost of a sales tax compliance audit is to be borne by the taxpayer, pursuant to R.S. 47:337.75, the cost to the taxpayer shall not exceed thirty percent of the amount of the additional taxes determined to be due as the result of the audit.
F. Each contract entered into pursuant to this Section may be subject to review and oversight by the legislative auditor pursuant to R.S. 13:5529. Contracts entered into after July 1, 2010 shall contain a statement by the local collector and private agency or auditing firm certifying that the terms and conditions of the contract are in compliance with the requirements of the provisions of this Section. Any contract that does not satisfy the requirements of this Section may be declared null and void by a court of competent jurisdiction.
G. The private agency or auditing firm hired for the purposes of this Section, including any employee, contractor, or other agent of such private agency or auditing firm conducting such examination or audit, shall be subject to the Code of Governmental Ethics as set forth in R.S. 42:1101 et seq.
Acts 2003, No. 73, §1, eff. July 1, 2003; Acts 2010, No. 1029, §1, eff. July 8, 2010; Acts 2022, No. 596, §1, eff. July 1, 2022.