Louisiana Sales Tax Payment Plan & Resolution
Checklist
Louisiana requires businesses that qualify as dealers under state law to obtain a sales tax certificate and remit sales tax to the state on a regular schedule. If you owe sales tax to the Louisiana Department of Revenue, whether from unpaid filings, audit assessments, or prior business operations, the state may allow you to establish an installment agreement to resolve the debt. A sales tax payment plan is a formal arrangement between you and the Department of Revenue that will enable you to pay what you owe over time instead of in one lump sum.
This process matters because it can help you avoid wage garnishment, tax liens, or business license suspension. Ignoring sales tax debt or refusing to establish a payment plan typically triggers escalated collection activity, including penalty assessments, interest charges, and enforcement actions. Understanding how Louisiana's sales and use tax payment process works will help you respond appropriately and protect your financial situation.
What This Issue Means
A sales tax payment plan is a written installment agreement with the Louisiana
Department of Revenue that sets specific payment amounts and due dates for sales tax you owe. This agreement typically covers back taxes, penalties, and interest that have accumulated from unpaid or underpaid sales tax returns filed through systems such as
LaTAP File & Pay or Sales Tax Online. The plan does not eliminate what you owe; it
restructures the tax debt into manageable monthly installments that you must pay through automatic ACH debit from your bank account.
Why the State Issues This or Requires This
The Louisiana Department of Revenue issues payment plans for taxpayers with unpaid sales tax liabilities. Common triggers include missed sales tax remittance, underreported sales on tax returns, assessments following tax audits, or failure to register as a dealer for sales and use tax collection. The state uses installment agreements to collect revenue while giving taxpayers a path to compliance without forcing immediate full payment, allowing businesses to remain operational while resolving tax problems.
What Happens If This Is Ignored
If you ignore a sales tax debt or refuse a payment plan offer, the Louisiana Department of Revenue typically escalates collection activity. This may include filing tax liens against your personal or business property, initiating wage garnishment (up to 25% of your wages), suspending your business licenses, or referring the matter to the Office of Debt
Recovery within the Department of Revenue for further collection action.
The longer the debt remains unresolved, the more penalties and interest accumulate, making the total amount owed significantly larger. Criminal charges may apply in cases involving willful tax evasion or fraud, but simple late filing of tax returns or failure to pay does not result in criminal prosecution.
What This Does NOT Mean
Receiving or being offered a payment plan does not mean your sales tax liability has been reduced or forgiven through settlement offers or an Offer in Compromise. The state may still file tax liens even while you maintain an active payment plan if the tax due exceeds $2,500 or if payments extend beyond 12 months. A payment plan is not a settlement; it is a structured repayment arrangement for the full amount owed plus any interest and penalties already assessed.
Interest and delinquent payment penalties will continue to accrue on the unpaid balance throughout the duration of the installment agreement.
Checklist: What to Do After Receiving This or Identifying
This Issue
Follow these steps if the Louisiana Department of Revenue has contacted you about a
sales tax debt or payment plan
Step 1: Locate and Review All Notices
Gather any notices, bills, or correspondence you received from the Louisiana
Department of Revenue regarding sales tax liability. Read each notice carefully to identify the tax period involved, the amount owed, and any due date mentioned. Keep these documents in a safe, organized location for reference.
Step 2: Verify Your Sales Tax Account Status
Contact the Louisiana Department of Revenue at (855) 307-3893 to confirm whether you have an active sales tax account, whether you owe current or back taxes, and whether a payment plan has already been established. When connecting to the official website or sharing sensitive information, ensure you use official Louisiana government websites, such as revenue.louisiana.gov. Obtain written confirmation of your account balance and any existing agreements.
Step 3: Calculate or Verify the Total Amount Owed
Review the amount stated in the notice or payment plan offer. Ensure you understand which tax periods are included, whether penalties and interest are already factored in, and that future interest will continue to accrue during the payment plan. Ask the
Department of Revenue to provide a detailed breakdown if the calculation is unclear.
Step 4: Determine Your Current Financial Situation
Assess your ability to make tax payments according to the proposed plan terms. Review your monthly income, fixed expenses, and existing debts. Prepare for the mandatory
20% down payment and the $105 non-refundable installment agreement fee (waived if your Louisiana adjusted gross income is $25,000 or less based on your most recently filed state income tax return). Consider whether the proposed payment schedule is realistic for your financial circumstances.
Step 5: Understand Payment Plan Requirements
Louisiana requires automatic ACH debit from your bank account for all payment plan installments. You cannot simply mail checks or use credit cards for installment payments; tax payments will be automatically withdrawn from your checking or savings account on the date you specify. For informal installment agreements (amounts less than $50,000), the maximum payment period is 60 months. Formal installment agreements are required if the amount owed is $50,000 or more or if the payment period exceeds 60 months.
Step 6: Contact the Louisiana Department of Revenue Before the Deadline
Do not wait for enforcement action or liens and garnishments. Call the Department of
Revenue Collection Division at (855) 307-3893 to discuss your account and any payment plan offer. Request a copy of the proposed payment plan in writing. Ask about options if the current terms do not match your ability to pay.
Step 7: Submit Your Installment Agreement Application
Complete the appropriate installment request form and submit it through the Louisiana
Tax Assistance Program (LaTAP) online payment portal, by email to collection.inquiries@la.gov, or by mail to the Collection Division at P.O. Box 66658,
Baton Rouge, LA 70896-6658. Include your 20% down payment and installment agreement fee (if required) with your application. Attach a voided check for the automatic bank draft authorization. Do not include your Social Security Number or other sensitive information in unsecured email communications.
Step 8: Consult Tax Professionals If Needed
If your tax debt is complex or involves multiple tax types, such as withholding tax, business tax, or Corporation Income and Franchise Tax, consider consulting a certified public accountant or an enrolled agent who understands Louisiana law. Tax professionals can help you navigate the payment plan process and ensure all required tax forms are correctly filed.
Step 9: Set Up Payment Tracking
Create a calendar or reminder system for all payment due dates. Ensure sufficient funds are in your designated bank account before each automatic withdrawal date. Keep copies of all bank statements showing the automatic debits and maintain records of all tax payments made under the installment agreement.
Step 10: Monitor Your Sales Tax Filings
Continue to file and pay your current sales tax returns on time while following the payment plan for back taxes. This applies whether you file through Electronic Filing systems, the Sales Tax Filing System, or submit Combined State and Local Sales Tax
Return forms. Failure to pay current sales tax or file current returns may violate your payment plan agreement and result in default.
Step 11: Stay Current with All Louisiana Tax Obligations
Ensure you remain compliant with all state taxes, including income tax, property tax
(including homestead exemption filings), and any other tax liabilities required under
Louisiana law. Failure to stay current with any tax obligations to the Louisiana
Department of Revenue can trigger default of your installment agreement.
- Missing Payment Due Dates or Having Insufficient Funds
- Not Communicating If You Cannot Pay
- Continuing to File Late or Underpay Current Sales Tax
- Assuming the Plan Includes Penalty Abatement or Tax Relief
- Confusing State and Federal Tax Problems
- 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: Request a Receipt or Confirmation When the Plan Is Complete
Contact the Collection Division before making the final payment, as penalties, interest, and collection fees will continue to accrue until the tax debt is paid in full. Once you have made the final payment, request written confirmation from the Louisiana
Department of Revenue that your payment plan is satisfied and your account is resolved.
What Happens After This Is Completed
Once you establish a payment plan and begin making regular automatic payments, the
Louisiana Department of Revenue typically suspends active collection activities, such as wage garnishment or asset seizure, provided you meet the terms of the agreement.
The state will continue to apply tax payments to your account balance, reducing the total owed with each installment. Interest and penalties continue to accrue on the unpaid balance throughout the payment plan.
If you miss a payment or fall behind, the state may restart collection activity, accelerate the remaining balance, or terminate the payment plan agreement. If you default and later seek reinstatement, you must pay a $60 reinstatement fee (or $105 if the contract was cancelled for 90 days or longer), waived only if your adjusted gross income is
$25,000 or less.
Common Mistakes to Avoid
One of the most frequent errors is failing to maintain sufficient funds in your bank account for automatic ACH debit withdrawals. Even one missed payment due to insufficient funds can trigger default of the entire agreement, result in an NSF fee, and restart collection activity.
If financial hardship prevents a payment, many taxpayers avoid contacting the
Department of Revenue. The state takes missed payments seriously and escalates enforcement quickly. Contact the Collection Division immediately at
(855) 307-3893 to discuss the situation.
Some taxpayers focus solely on the payment plan, neglecting current filings. If you owe back taxes and fail to pay current sales tax on time or commit late filing of tax returns, you violate the payment plan agreement and will be in default.
Payment plans are not tax relief programs that reduce what you owe. The plan covers payment of the tax liability plus existing penalties and interest, all of which continue to accrue during the payment plan. This is different from settlement offers or the federal Offer in Compromise programs.
A Louisiana Department of Revenue installment agreement only resolves state taxes owed to Louisiana. It does not address federal taxes owed to the Internal
Revenue Service or tax problems in other states. If you have both state and federal tax problems, you must address each separately through the appropriate agency.
Frequently Asked Questions
Does entering into a Louisiana sales tax payment plan mean the state has forgiven part of my debt?
No. A payment plan is a repayment agreement for the full amount owed, including all penalties and interest assessed. It does not reduce or forgive any portion of the liability through tax relief or settlement offers.
What are the fees and down payment requirements for a Louisiana sales tax payment plan?
You must pay a non-refundable $105 installment agreement fee and a 20% down payment of the total amount due. Both fees are waived only if your Louisiana adjusted gross income is $25,000 or less based on your most recently filed state income tax return.
Can the state still file tax liens if I have a Louisiana sales tax payment plan?
Yes. The state may file tax liens during an active payment plan if the tax due exceeds
$2,500 or if payments extend beyond 12 months. If you default on the plan by missing payments, the state may also file additional liens and enforce garnishments.
Will interest continue to accrue while I am making payments on my
Louisiana sales tax payment plan?
Yes. Interest and delinquent payment penalties will be assessed on the unpaid amount through the duration of the installment agreement.
How long can a Louisiana sales tax payment plan last?
For informal installment agreements (amounts less than $50,000), the maximum payment period is 60 months. Formal installment agreements are required if the amount owed is $50,000 or more or the payment period exceeds 60 months.
Can I pay off the Louisiana sales tax payment plan early without penalty?
Most installment agreements allow early payment without additional penalty. Contact the Louisiana Department of Revenue Collection Division at (855) 307-3893 to request the exact payoff amount, including any final interest calculation.
What payment methods are accepted for Louisiana sales tax payment plans?
Louisiana requires automatic ACH debit from your bank account for installment agreement payments. You must provide bank account information and authorization for
automatic withdrawals. The online payment portal (LaTAP) can be used for initial down costs, but ongoing installment payments must be made by automatic bank draft.
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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