Louisiana Sales Tax Nonpayment Risk Checklist
Sales tax nonpayment in Louisiana occurs when a business or seller fails to remit collected sales tax to the Department of Revenue within the required timeframes. This is a significant issue because sales tax belongs to the state, not the business, and nonpayment triggers administrative enforcement actions that can escalate quickly.
Ignoring nonpayment notices compounds the problem through tax penalties, interest, and potential legal collection activity.
Understanding what nonpayment means and recognizing early warning signs helps taxpayers respond appropriately before enforcement becomes more serious. This checklist outlines the typical path from initial nonpayment through state collection activities, so you can understand what to expect and the steps available to resolve your tax obligations.
What This Issue Means
Sales tax nonpayment means the Louisiana Department of Revenue has identified a gap between the sales tax a seller should have remitted and what was actually paid.
This gap may result from a missed payment deadline, an incomplete payment, or a pattern of unfiled returns with no payment submitted. Nonpayment differs from an incorrect amount; it means the money owed to the state was not transferred at all, or was only partially transferred.
The state typically identifies this issue by comparing filed returns to actual payments received, or by noticing that no return was filed when one was required. At this stage, the state has recognized the debt but may not yet have initiated formal collection action.
Businesses with a sales tax permit must file returns according to their assigned filing frequency, whether monthly or quarterly.
Why the State Issued This or Requires This
Louisiana requires sales tax collection and remittance because sales tax funds state operations and local services. The state tracks remittance through its return filing and payment processing system. When a sales tax return is filed without a corresponding payment, or when a payment deadline passes without a submission, the Department of
Revenue generates a record of the unpaid amount.
Sales and use taxes are due on or before the 20th of the month following the close of the calendar month or calendar quarter of the reporting period. Businesses are assigned either a monthly or a quarterly filing frequency based on their tax liability. The
Department of Revenue issues notices to inform sellers of unpaid amounts and provide an opportunity to resolve the matter voluntarily before escalating to more serious collection measures.
What Happens If This Is Ignored
If sales tax nonpayment remains unresolved, the Louisiana Department of Revenue typically moves through escalating collection steps. This may include additional notices requesting payment, assessment of penalties and interest on the unpaid amount, and
possible referral to the state's collection unit or legal division. In some cases, the state may pursue collection through liens, levies, or other enforcement mechanisms similar to those used by a Tax Collector.
Failure to pay penalties begins at 5% of the tax owed and increases by 5% every 30 days, up to a maximum of 25%. Interest accrues at an annual rate of 11.25% as of 2025 under the Louisiana sales tax system. The state may file a lien without notice at any time once a balance becomes due and enters the collection process. Louisiana has a
10-year collection period for sales tax debt, beginning on the date of assessment.
What This Does NOT Mean
Nonpayment of sales tax does not automatically mean criminal charges will be filed or that immediate asset seizure will occur. It does not mean the business registration or sales tax permit has been revoked yet, though nonpayment can eventually lead to license suspension or revocation under separate state rules. Nonpayment also does not mean the state has already filed a lawsuit; it typically means the state is still in the administrative collection phase and providing the taxpayer with an opportunity to resolve the debt.
This notice is unrelated to property tax, occupational license tax, or any federal tax obligations. Sales and use tax collection is a separate matter handled by the Louisiana
Department of Revenue and does not involve federal agencies or the Federal Employer
Identification Number verification process.
Checklist: What to Do After Receiving a Nonpayment
Notice
Step 1: Locate and Organize All Notices and Documentation
Gather every notice received from the Louisiana Department of Revenue related to sales tax. Write down the date each notice was received and note the notice number and the tax period it covers. Organize notices in chronological order, keep original notices in a safe location, and make copies for your records.
Step 2: Verify What Periods Are Affected
Review each notice to identify which sales tax return periods are affected. List the specific months or quarters mentioned and note the dollar amount listed as unpaid for each period. Add up total amounts owed across all periods, check your own payment records to see what you believe was paid, and document any discrepancies between the notice and your records.
Step 3: Review Your Payment History
Locate your banking records for the relevant periods. Find all canceled checks, bank statements, or electronic payment confirmations related to sales tax. Write down the date, amount, and confirmation number for each payment made, note which tax period each payment was intended to cover, and identify any payments you made that may not have been received or properly credited.
Step 4: Check Your Filed Returns
Obtain copies of every sales tax return filed for the affected periods. Review each return to confirm the sales tax amount reported as due, and compare the return amounts to those shown on the state's notice. Note any discrepancies in reported liability and keep all filed returns organized by tax period.
Step 5: Contact the Louisiana Department of Revenue
Contact the Department of Revenue to request clarification on the nonpayment claim.
Provide them with your account number and tax registration number. Ask them to explain the specific periods and amounts listed as unpaid, what proof of payment they need if you believe you paid, and request that they confirm the current status of your account. Document the date, time, and name of the person you spoke with and request written confirmation of whatever information they provide.
Step 6: Gather Proof of Payment, If Applicable
If you believe a payment was made but not credited, locate the original proof. Proof may include a canceled check, electronic payment confirmation, or bank statement showing the transfer. Ensure the evidence clearly indicates the amount, date, and recipient
(Louisiana Department of Revenue or tax payment processor), make copies of all proof
documents, and organize proofs by the tax period they relate to.
Step 7: Prepare a Written Response to the State
Create a clear, factual summary of your position. Include copies (not originals) of all relevant documentation, explain any nonpayment periods and why they occurred if you are aware, and provide copies of any payments you made with proof of delivery.
Address any discrepancies between the notice and your records, keep the tone
professional and factual, and number all pages with a simple cover letter listing what you are enclosing.
Step 8: Submit Your Response Within the Deadline
Locate any deadline mentioned in the nonpayment notice. If a deadline is listed, mark it on your calendar immediately and prepare your response well before it. Send your response by certified mail with a return receipt. If required, keep a copy of everything sent for your records, and document the mailing date and tracking number.
- Missing response deadlines typically eliminate your opportunity to resolve the
- Always send copies of proof documents, not originals, because the state
- After submitting an initial response, additional notices may arrive and require the
- If you send proof of payment, ensure it clearly shows the amount, date, tax
- Even after submitting documentation and payment, continue monitoring your
- Write down the date, name, and summary of every conversation with the
- Before making a payment to resolve nonpayment, confirm the exact amount
- 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 9: Consider Professional Assistance
If the situation is complex or the amounts involved are substantial, consider consulting a tax professional. A qualified tax professional can help review your documentation, communicate with the Louisiana Department of Revenue on your behalf, and ensure regulatory compliance with all state requirements. This may be particularly helpful if you are uncertain about your tax obligations or need assistance navigating the sales tax system.
What Happens After This Is Completed
After you submit your response and documentation to the Louisiana Department of
Revenue, the state reviews your submission and either resolves the discrepancy or requests additional information. If the state agrees that payment was made but not credited, the account is adjusted, and a corrected notice may be issued. If the state finds that genuine nonpayment occurred, you will likely receive notice of next steps,
which may include payment arrangements, escalated collection action, or other enforcement procedures.
Response times vary based on case complexity and department workload. Continue to monitor your account and watch for any additional correspondence from the state regarding your submission.
Common Mistakes to Avoid issue informally and may trigger failure-to-file penalties or more serious enforcement action. processes high volumes of mail, and original records can be lost. same attention as the first notice. period, and recipient. account for additional notices.
Department of Revenue to maintain accurate records. owed and which periods it covers to ensure proper application of funds.
Frequently Asked Questions
How long does the state have to collect sales tax debt?
Louisiana has a 10-year collection period for sales tax debt, beginning on the date of assessment. The assessment period is 3 years from December 31 of the year taxes were due. This collection timeline is separate from property tax or other state tax matters.
If I pay the sales tax, will penalties and interest be waived?
Under Revised Statute 47:1603 and LAC 61:III.2101, delinquent filing or payment penalties may be waived if the delay was due to reasonable cause rather than negligence. You may submit a penalty cancellation request electronically through the
Department of Revenue. Interest typically continues to accrue unless specifically waived by the state.
Can I set up a payment plan for unpaid sales tax?
The Louisiana Department of Revenue offers installment agreements for taxpayers who cannot pay the full balance. Businesses may apply using Form R-19027 (Installment
Request for Business Taxes) available through the state's online portal. A $105 installment agreement fee applies, and payment plans are available through the LaTAP system for electronic payment processing.
Will a non-payment notice affect my business license?
Sales tax nonpayment can eventually lead to suspension or revocation of business registration or a sales tax permit, but this is typically a separate administrative process.
The suspension or revocation of licenses can be prevented by payment of the
delinquent taxes within 60 days of receiving notice from the Louisiana Department of
Revenue.
How do I know if the state has filed a lien against my business?
The Louisiana Department of Revenue may file a lien without notice at any time once a balance becomes due and enters the collection process. Contact the Department of
Revenue directly to ask whether a lien exists on your account. This is separate from any property tax liens that may be filed by parish or municipal authorities.
Should I continue filing current returns if I have unpaid past returns?
Yes, continue to file current sales tax returns while resolving past debt. Failing to file current returns creates additional failure-to-file penalties, further compounding the problem. Maintaining current filings demonstrates good faith and helps prevent additional enforcement action while you work to resolve outstanding balances.
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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