BATON ROUGE, La. (AP) – The head of a powerful Louisiana business lobbying group is urging companies that operate in multiple states to pursue refunds for taxes paid under a 2015 law that has been declared unconstitutional.
Stephen Waguespack, president of the Louisiana Association of Business and Industry, said those companies should contact tax professionals to determine ways to seek the recovery if they paid taxes under the now-struck-down law.
“Taxpayers need to take steps now to protect themselves,” Waguespack wrote in his weekly column.
The Louisiana Supreme Court this month threw out the three-year-old law that scaled back an income tax break the state allows for taxes paid to other states. The change made the credit only available for income taxes paid to a state that offers a similar credit to its residents who do business in Louisiana.
Two part-owners of multiple companies doing business in Texas, Arkansas and Louisiana challenged the law, saying it subjects some business owners to illegal double taxation. The Louisiana Supreme Court agreed, upholding a lower court decision that the law violates a U.S. Constitution provision governing interstate commerce.
At the time of passage, the change was estimated to raise about $30 million annually for the state. After the court ruling, Revenue Secretary Kimberly Robinson said Louisiana only will have to return $23,000 that the taxpayers who filed the lawsuit paid into an escrow account under protest.
Robinson said if any other taxpayers sought to amend their tax returns to claim they overpaid, she would deny the refunds. She said taxpayers would have had to pay under protest to challenge the taxes owed. Appeals could be lodged with a tax board. But Robinson said if the appeals were successful, the dollars only would be repaid if lawmakers appropriated the money.
Waguespack said all the money collected under the unconstitutional law should be returned to taxpayers.
“The administration and Legislature need to right this wrong. They should do everything they can to reimburse people who were double-taxed. Mistakes happen, but when found, they must be rectified rather than swept under the rug,” he wrote.
Ahead of the high court’s decision, lawmakers tweaked the tax credit provision earlier this year in response to the lawsuit’s claims. If other changes are needed, Robinson said her agency will work with lawmakers in next year’s legislative session to make them.