LouisianaOctober 20223 min read

Louisiana’s Deadline to Appeal a Denied Sales Tax Refund Claim

Sales tax refund claims are an essential tool for recovering overpayments of tax. However, your right to a sales tax refund is not without limit as each state has its own procedural rules you must follow. Additionally, deadlines exist that limit the time you have to file an appeal when the department of revenue or another taxing authority denies your sales tax refund claim.

A recent case from the Louisiana Board of Tax Appeals (BTA) highlights the importance of involving sales tax professionals early in the appeal process to prevent valid refund claims from lapsing. The case, Nucor Steel v. St. James Parish Tax Agency, eventually reached the Supreme Court of Louisiana where the Court gave final clarity on Louisiana’s deadline for appealing a denied sales tax refund claim. The outcome, unfortunately, places unsuspecting taxpayers at a disadvantage when interacting with Louisiana tax agencies. Along with the details of the case, we’ll explain what the Supreme Court’s decision means for you or your client’s business when it comes to claiming a sales tax refund in Louisiana and protecting your rights to an appeal.

Louisiana — Sales Tax

Background on Nucor Steel v. St. James Parish Tax Agency

In Nucor Steel, the taxpayer filed a sales tax refund claim in 2016 with the St. James Parish Tax Agency (the “Collector”). The Collector engaged in correspondence with the taxpayer regarding the refund claim, mostly in the context of requesting information to process the claim and providing status updates. Eventually, the Collector formally denied the sales tax refund claim via written notice two years later in 2018.

The taxpayer appealed to the BTA a few months later. The Collector then argued the taxpayer’s appeal was untimely under Louisiana’s RS 47:337:81 because it only had 180 days to appeal the refund claim when the Collector failed to act on the claim within one year of filing. The issue was then over the meaning of “fail to act” under the statute. Specifically, whether it only referred to the Collector’s failure to render a decision on the refund claim (i.e., grant or deny it) or could include other actions such as providing status updates and other communication.

Appeals Process

Louisiana Board of Tax Appeals (BTA)

Deadline: 60 days from Notice of Assessment

Receive Assessment

Louisiana Department of Revenue or a parish collector issues the assessment. Parish assessments are separate from state — each has its own deadline.

File Written Protest

A written protest within 60 days can seek reconsideration before formal BTA proceedings. Useful for straightforward factual disputes.

File BTA Petition

Bring the dispute to the Louisiana Board of Tax Appeals — an independent tribunal. File a separate petition for state and each local collector.

Post-Petition Proceedings

After filing, the BTA schedules proceedings. A representative familiar with Louisiana's dual state/local system is strongly recommended.

Hearing and Decision

The BTA conducts a hearing and issues a written decision. The decision can be appealed to the Louisiana Circuit Court of Appeal.

How the Louisiana Board of Tax Appeals and Supreme Court Interpreted RS 47:337:81

The taxpayer argued that “failure to act” could refer to any action from the Collector, including its correspondence and statements that a decision on the claim was in progress. Therefore, the limitation period for filing an appeal should not have started until after the taxpayer received the notice denying the sales tax refund claim. The BTA and the Louisiana Supreme Court ultimately disagreed, holding that “failure to act” could only mean a failure to grant or deny the refund claim. As a result, the taxpayer in this case could not obtain a sales tax refund because the appeal deadline had passed.

The Bottom Line for Louisiana Taxpayers Claiming a Sales Tax Refund

While the Supreme Court of Louisiana’s holding creates a clear rule on the appeal deadline, it is also unfair and to the detriment of taxpayers who lack familiarity with the process. The ruling allows Louisiana tax authorities to potentially mislead taxpayers while handling their refund claims (whether accidental or not). Tax agencies are notoriously slow in processing claims. Like the taxpayer in Nucor Steel, you may falsely think your refund claim is in progress only to receive a denial and find out your appeal deadline has passed due to the legal interpretation of “inaction” from Louisiana’s tax authority under RS 47:337:81.

This case demonstrates taxpayers should have a healthy amount of skepticism when engaging with tax agencies in Louisiana. For example, set calendars for one year from the date of filing a sales tax refund claim in Louisiana to stay aware of when an appeal period might begin if no decision is made on your claim. Involving sales tax professionals early could also provide a useful hedge against the risk of letting your appeal period lapse by allowing them to manage the sales tax refund claim process for you.

Need Help with a Sales Tax Audit, Assessment, or Appeal in Louisiana?

If you are wondering about the status of a sales tax refund claim, need to process one, or are curious about your appeal options, consider a consultation with Sales Tax Helper. We are a team of sales tax consultants that lend our experience and expertise to help businesses manage and navigate their issues with state and local sales tax authorities. As Nucor Steel shows, handling sales tax matters can be complex and filled with rules that unfairly disadvantage taxpayers who simply want to pay what they owe and nothing more. Where possible, we work to tip those scales back toward the taxpayer’s favor as a cost-effective solution in sale tax defense.

Schedule a consultation with Sales Tax Helper about your refund claim or other sales tax issue.

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