Businesses owed the state about $785 million in unpaid taxes at the end of the fiscal year that concluded June 30, 2018, the Louisiana Legislative Auditor says.
The Department of Revenue collected about $9.2 billion that year across all tax types. About 90 percent of the money the department collects comes from businesses, though that includes employer withholding of individual income taxes.
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About 70 percent of the unpaid business collections are sales or employer withholding taxes that businesses collected but did not remit to the state. A little over 69 percent is considered collectable; the department considers owed taxes uncollectable when its officers have exhausted their collection tools or once the debt is 10 years old.
While the amount of unpaid debt increased by $170.8 million since fiscal year 2016, staffing in the department’s Business Tax Enforcement division has decreased by 8.3 percent, the Legislative Auditor says. In a new report, the auditor's office recommends ways the department could strengthen collections, including:
- Upgrading tax software.
- Prioritizing newer cases rather than older ones, which is the current practice. Newer debt is more likely to be collected, the auditor's office says.
- Using data to determine which collection methods are most effective.
- Making voluntary compliance easier by making tax letters easier to understand, making its website more user-friendly, and improving its call center.
In its response to the Legislative Auditor's report, the Department of Revenue says it plans to upgrade its software during the current fiscal year, and says it is discussing with the vendor prioritization strategies available within the system. Department officials regularly meet with counterparts from other states to discuss best practices, they say.
Revenue officials say they already are "keenly aware" of which processes and procedures best generate payments. They say they are looking for ways to make it easier for taxpayers to enter into installment agreements to pay delinquent taxes.
Department officials say they are testing new tax language using "plain language" guidance. They say they are updating their website and re-opening regional offices, giving taxpayers the option of resolving tax issues in a local office.