Louisiana Payroll Tax Nonpayment Emergency
Checklist
Louisiana payroll tax nonpayment occurs when an employer fails to remit withheld income tax or other required payroll contributions to the Louisiana Department of
Revenue within the deadline specified by Louisiana law. Payroll taxes are mandatory withholdings from employee paychecks that employers must collect and forward to the state. These funds are not the employer's own money but employee money held in trust.
When payroll taxes go unpaid, the state treats it as a serious compliance issue because it directly affects both state revenue and individual employees' income tax records.
Ignoring Louisiana payroll tax nonpayment triggers escalating collection actions, including penalties, interest, wage garnishments, and potential license revocation or legal action. This issue appears early in the state's collection process, and resolving it quickly is important because the consequences compound rapidly once enforcement begins.
What This Issue Means
Payroll tax nonpayment means that withheld employee taxes or employer-required payroll contributions were not sent to Louisiana's Department of Revenue by their due date. This is distinct from an employer simply owing their own tax debt. Payroll taxes represent money already deducted from workers' paychecks or amounts the employer is legally required to remit on behalf of employees, similar to how federal taxes are withheld and remitted to the Internal Revenue Service.
The state typically becomes aware of nonpayment when a scheduled payment fails to process or when the employer's account shows a gap between the filing and payment dates. At this stage, the nonpayment is documented, and the employer's account reflects a delinquent balance. Necessary clarification: unemployment insurance taxes are administered by the Louisiana Workforce Commission, not the Department of
Revenue, and follow separate procedures under the Louisiana Revised Statutes governing workforce programs.
Why the State Requires This
Louisiana requires payroll tax remittance because state law mandates that employers withhold employee income taxes and remit them on specific schedules established by the Secretary of Revenue. The state has a legal obligation to collect these funds on behalf of employees and to maintain wage-earner compliance records. These withholding requirements function alongside federal income tax withholding, which employers report on W-2 forms to the Internal Revenue Service.
Common reasons for nonpayment include missed deadlines, banking errors, cash flow problems, misunderstandings of payment schedules, or administrative oversights. The state's systems automatically flag delinquent accounts when tax payments are not received by the due date. This is a routine administrative trigger, not a judgment about the employer's intent; it is simply how the state's collection process begins.
What Happens If This Is Ignored
If Louisiana payroll tax nonpayment is not addressed, the Louisiana Department of
Revenue typically issues formal notices requesting payment. The state assesses penalties and interest on the outstanding balance, increasing the total amount owed.
Penalties begin at 5% of the tax owed and increase by 5% every 30 days under
Louisiana Revised Statute 47:1602, up to a maximum of 25%. Interest accrues at an annual rate of three percentage points above the judicial interest rate under Louisiana
Revised Statutes 47:1601. For 2026, this equals 10.5% per annum.
Over time, the state may place a tax lien on the employer's business or personal property without notice and without a court order if it is in the state's best interest. The state may initiate a bank levy to garnish business bank accounts or suspend business licenses or permits. In some cases, the state may pursue collection through legal action or refer the matter to its enforcement division, as the Office of Debt Recovery does for certain government debts. Each additional action adds collection costs and complexity, making early resolution significantly less burdensome than allowing the matter to escalate.
What This Does NOT Mean
Nonpayment of payroll taxes does not automatically mean criminal charges for tax evasion have been filed or that the employer will immediately lose their business license. It does not mean employees' wages will be garnished or that a lien has already been placed on property; these are possible future collection actions, but they are not automatic consequences of nonpayment alone. Nonpayment also does not mean the employer cannot resolve the issue or negotiate a path forward with the state through options such as installment agreements or, in rare cases, an offer in compromise.
At this stage, the matter remains in the administrative collection phase, not a legal judgment or final enforcement action. The situation differs from other tax matters, such as sales tax disputes, property tax issues, or federal tax obligations. Understanding that
this is an administrative compliance issue helps employers respond appropriately without unnecessary panic.
Checklist: What to Do After Identifying Payroll Tax
Nonpayment
Step 1: Gather your payroll tax records.
Locate your Louisiana tax filing records, payment receipts, and bank statements covering the period in question. Identify the specific tax type (income tax withholding, etc.), the period owed, and whether any partial payments were made. Collect copies of any W-2 forms or related payroll documentation that show withholding amounts.
Step 2: Review any notices received from the Louisiana Department of
Revenue.
If you have received a notice, letter, or statement from the Department of Revenue, review it carefully. Note the amount owed, the due date shown, the tax period covered, and any deadline for response or payment. Compare the notice details against your own records to verify accuracy.
Step 3: Contact the Louisiana Department of Revenue.
Call the Department of Revenue at 855-307-3893 to confirm the balance owed and obtain clarity on the exact amount, penalties, interest, and current status of your account. Document the name, date, time, and content of this conversation. This direct communication establishes your intent to resolve the matter and may prevent additional collection actions.
Step 4: Determine the source of the nonpayment.
Review your business records to understand why the payment was not made. Check banking records, Electronic Funds Transfer confirmations, payment processing logs, or payroll system records to identify whether the payment failed to process, was delayed, or was never initiated. Understanding the root cause helps prevent future occurrences.
Step 5: Calculate the full amount currently owed.
Ask the Department of Revenue for a complete breakdown of the outstanding balance, including the original tax amount, applicable penalties under Louisiana Revised Statute
47:1602, and accrued interest calculated under Louisiana Revised Statute 47:1601.
Request written confirmation of this total to ensure accurate payment.
Step 6: Assess your ability to pay in full immediately.
Determine whether you can pay the full balance owed immediately using available business funds, a credit card, or other resources. If yes, proceed to Step 7. If no, proceed to Step 8 to explore payment arrangements.
Step 7: Arrange immediate payment if possible.
Contact the Department of Revenue's payment section and submit payment through the method they accept, including Electronic Funds Transfer, check, or the online LaTAP
File & Pay portal. Request a written receipt or confirmation of payment. Keep all documentation for your records to prove timely resolution if questions arise later.
Step 8: Contact the Department of Revenue to discuss payment options.
If immediate full payment is not possible, contact the Department of Revenue to inquire about available tax relief options. Inquire whether installment agreements or payment
plans are available. The state charges a $105 fee to establish an installment agreement under Louisiana law. In exceptional circumstances involving severe financial hardship, you may inquire about the LDR Offer In Compromise Program, though such compromises of judgments are rarely granted for payroll tax obligations.
Step 9: Request written confirmation of any arrangement made.
If the Department of Revenue agrees to a payment plan or other arrangement, request written documentation outlining the terms, payment amounts, dates, and consequences of missing payments under the agreement. This documentation protects both parties and ensures clear expectations.
Step 10: Follow all terms of any payment arrangement.
If a payment plan or agreement is in place, make all tax payments on the scheduled dates and amounts. Keep records of each payment made through LaTAP File & Pay or other approved methods. Interest and penalties continue to accrue on unpaid balances even during an installment agreement, so making payments promptly minimizes additional costs.
Step 11: Monitor your account status.
Continue to contact the Department of Revenue periodically to confirm that payments are being applied correctly and that your account status is current. Use the LaTAP online portal if available to check your account balance and payment history between phone contacts.
- Delaying contact with the Department of Revenue allows penalties and interest to
- Ignoring official notices is problematic. If the Department of Revenue sends a
- Paying without confirming the correct amount creates problems. Before sending
- Failing to follow payment plan terms causes issues. If you enter a payment
- Not keeping documentation creates vulnerability. Maintain copies of all notices,
- Assuming the issue will resolve itself is unrealistic. Louisiana payroll tax
- State enforcement notices and responses
- Sales tax audits, assessments, and collections
- Payroll & trust fund tax enforcement issues
- Penalty and interest reduction options
- Payment plans and state tax relief eligibility
- Representation before state tax agencies
Step 12: Prevent future nonpayment.
Review your payroll tax filing and payment procedures to prevent recurrence. Consider implementing a calendar reminder system, delegating responsibility to a specific staff member, or using a professional payroll service to ensure timely future filings and payments. Confirm that your withholding calculations align with current withholding tables and that all electronic filing and payment systems function correctly.
What Happens After This Is Completed
After you contact the Department of Revenue and initiate resolution steps, the state's collection division typically processes your account and updates your status in their system. If full payment is received, the account balance is reduced or cleared, and the
Department of Revenue may issue a written confirmation. If a payment plan is established, your account is flagged as being under an active arrangement, and the state monitors whether you make the scheduled payments.
The state does not automatically reverse penalties or interest that have already been assessed. However, under Louisiana Revised Statute 47:1603, delinquent filing or payment penalties may be waived if the delay was due to reasonable cause rather than negligence. The Secretary of Revenue has discretion to approve such requests if proper documentation supports the claim. Once your account shows a current status or an active payment arrangement, the state generally pauses collection escalation activities while the agreement remains in good standing.
Common Mistakes to Avoid accrue. The longer nonpayment remains unaddressed, the more penalties and
interest accumulate under Louisiana Revised Statute provisions. Early contact often leads to simpler resolution paths and demonstrates a good-faith effort to comply. notice or letter, responding promptly is essential. Ignoring official correspondence may be interpreted as non-cooperation and can trigger faster escalation to wage garnishments, bank levy actions, or tax lien filings. tax payments, confirm the exact balance with the state in writing. Sending an estimated amount may result in continued collection activity for the difference, and any overpayment can create unnecessary delays in obtaining tax refunds for excess amounts paid. arrangement, missing even one scheduled payment may cause the state to resume complete collection actions, including liens or garnishment. Set up automatic payments via Electronic Funds Transfer, if possible, to avoid missed payments. payment receipts, confirmation letters, and communication records. These documents protect you and provide proof of compliance if questions arise later, particularly if the state pursues additional collection costs or enforcement measures. nonpayment does not go away on its own. The longer it remains unresolved, the
more costly and complicated it becomes, potentially affecting your ability to operate your business in the United States under Louisiana law.
Frequently Asked Questions
How much time do I have to respond after the state identifies nonpayment?
Contact the Department of Revenue immediately after identifying or receiving notice of nonpayment to learn your specific situation and any applicable deadlines. While
Louisiana law does not specify a standard response timeframe for initial notices, prompt action prevents escalation.
Will penalties and interest stop accruing once I contact the Department of
Revenue?
Penalties and interest typically continue to accrue on unpaid balances until the balance is paid in full or until a formal payment arrangement is in place. However, demonstrating reasonable cause may support a penalty waiver request under Louisiana Revised
Statutes 47:1603.
Can I deduct penalties and interest from future tax payments?
No. Penalties and interest cannot be deducted or offset against future tax obligations.
These amounts must be paid separately or included in a payment arrangement with the state.
Can the state place a tax lien on my property?
Yes. Once a lien balance becomes due and is in the collection process, the Louisiana
Department of Revenue may file a tax lien without notice and without a court order at
any time if it is in the state's best interest. This differs from other collection actions that may require additional procedures.
Will nonpayment affect my ability to renew business licenses or permits?
Nonpayment of payroll taxes may result in license or permit suspension or denial of renewal under Louisiana law. Contact your licensing agency directly to understand how tax delinquency affects your specific license status.
Facing State Tax Enforcement Action?
If you’ve received a notice related to sales tax or payroll tax enforcement and are unsure how to respond, our team can help you understand your options and next steps.
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