PART IV.  INTEREST AND PENALTIES

§1601.  Interest on unpaid taxes

A.(1)  When any taxpayer fails to pay a tax, or any portion thereof, on or before the day where it is required to be paid under the provisions of this Subtitle, interest shall be added to the amount of tax due and such interest shall be computed from the statutory payment date of the tax until the tax is paid.  The rate of interest shall be as provided for in Paragraph (A)(2) of this Subsection.  However, in the case of a waiver of restrictions and delays as provided for in R.S. 47:1565.1, if the taxpayer pays the tax due within ten days after the notice of assessment is mailed to him, the interest shall be computed to the thirtieth day after the filing of such waiver or to the date the deficiency is paid, whichever is earlier.  The interest provided for herein shall be an obligation to be collected and accounted for in the same manner as if it were a part of the tax due and can be enforced in a separate action or in the same action for collection of the tax and, unless otherwise provided for in this Title, shall not be waived or remitted.

(2)(a)  With respect to tax obligations, interest shall be determined as follows:

(i)  Prior to January 1, 2006, interest shall accrue at the rate of one and one-quarter percent per month and for any fraction of a month.

(ii)  Effective January 1, 2006, interest shall accrue at an annual rate of six percentage points above the rate provided for in R.S. 9:3500(B)(1).

(iii)  Effective January 1, 2007, interest shall accrue at an annual rate of five percentage points above the rate provided for in R.S. 9:3500(B)(1).

(iv)  Effective January 1, 2008, interest shall accrue at an annual rate of four percentage points above the rate provided for in R.S. 9:3500(B)(1).

(v)  Effective January 1, 2009, interest shall accrue at an annual rate of three percentage points above the rate provided for in R.S. 9:3500(B)(1).

(b)  In no event shall the interest rate provided for in Subparagraph (a) of this Paragraph exceed one and one-quarter percent per month and for any fraction of a month.

(c)  Abatement of interest attributable to unreasonable errors and delays by the department. In the case of any assessment of interest attributable in whole or in part to any unreasonable error or delay by the secretary or her designee (acting in an official capacity) in performing a ministerial or managerial act, the secretary may abate all or any part of such interest for any period.  For purposes of the preceding sentence, an error or delay shall be taken into account only if no significant aspect of such error or delay can be attributed to the taxpayer involved and after the department has contacted the taxpayer in writing with respect to such deficiency or payment.

(d)  In order to promote the effective administration of the tax laws of this state, the secretary may provide by rules and regulations promulgated pursuant to the Administrative Procedure Act for the compromise of the amount of interest to be added to the amount of the tax due as computed pursuant to this Section. A complete record of all such compromises shall be kept by the secretary, shall be open to public inspection and, notwithstanding the provisions of R.S. 47:1508 and 1508.1, shall be published in the department's annual report.

(e)  Waiver of interest when a managed audit is performed as agreed to by the secretary and the taxpayer.  The secretary may waive all or a part of the interest that would otherwise accrue on any amount identified to be due in a managed audit performed under the provisions of R.S. 47:1541(D).

(3)  Computation of interest on notices of tax due.  When a notice is issued for unpaid taxes, the interest computation date on the notice shall be fifteen days after the issue date of the notice.

(a)  If payment is received on or before the fifteenth day after the issue date, no refund of interest shall be issued.

(b)  If payment is received after the fifteenth day but on or before the thirtieth day, no additional interest will be assessed.

(c)  If payment is not received on or before the thirtieth day following the issue of the notice, the provisions of this Paragraph shall not apply to the notice and interest will continue to accrue as provided in Paragraph (A)(1) or (2) of this Section.

B.  Notwithstanding any provision of this Section or of any other Section of this Subtitle, the interest on any amount of tax outstanding on a specific date shall be computed at the rate applicable on such date.

C.  Interest at the rate established by R.S. 47:1624 shall be paid by a corporation on any underpayment of tax determined in accordance with R.S. 47:287.445.

D.(1)  When an individual income taxpayer files a tax return as required by Chapter 1 of this Subtitle on or before the tax return's due date, including extensions, and the secretary does not notify the taxpayer of any additional amounts owed within eighteen months of the tax return's due date, without regard to extensions, or date of filing, whichever is later, the interest imposition shall be suspended for the period beginning eighteen months after the tax return's due date, without regard to extensions, or date of filing, whichever is later, and shall not begin again until twenty-one days after the date of the secretary's notice to the taxpayer of any additional amounts due.

(2)  The suspension of interest shall not apply if the tax return was not filed by the due date, including extensions, or in any case for which fraud or criminal penalties are assessed.

(3)  The suspension of interest shall not apply when a taxpayer whose federal income tax return has been adjusted fails to furnish a statement to the secretary disclosing the nature and amounts of such adjustments within the prescribed period of time pursuant to R.S. 47:103(C).  If the taxpayer timely furnishes such a statement and the taxpayer did not receive notice of additional amounts owed to the Internal Revenue Service within eighteen months of the tax return's due date, without regard to extensions, or date of filing, whichever is later, the provisions of Paragraph (1) of this Subsection shall apply.

Amended by Acts 1970, No. 663, §1; Acts 1982, No. 853, §1, eff. Oct. 1, 1982; Acts 1992, No. 588, §1; Acts 1999, No. 205, §1, eff. June 11, 1999; Acts 2001, No. 788, §1, eff. Jan. 1, 2006; Acts 2005, No. 454, §1, eff. Aug. 1, 2005; Acts 2006, No. 180, §1, eff. Jan. 1, 2007; Acts 2011, No. 171, §1, eff. June 24, 2011.