RS 1772 - Repealed by Acts 2012, No. 834, §13, eff. July 1, 2012.
NOTE: §1772 as enacted by Acts 2021, No. 297, eff. Jan. 1, 2022.
RS 1772 - Fresh Start Proper Worker Classification Initiative
A. The Fresh Start Proper Worker Classification Initiative is optional and provides a taxpayer with an opportunity to voluntarily reclassify his worker as an employee for a future tax period. To be eligible, a taxpayer shall meet all of the following requirements:
(1) Apply to the Fresh Start Proper Worker Classification Initiative between January 1, 2022, and December 31, 2022.
(2) Produce a certificate of proof of workers' compensation coverage for the employee.
(3) Enter into a closing agreement with the Louisiana Workforce Commission and the Department of Revenue.
B. The Fresh Start Proper Worker Classification Initiative applies to taxpayers that are currently treating their workers as independent contractors or other nonemployees and want to prospectively treat the workers as employees. To be eligible, a taxpayer shall have consistently treated the workers for the previous three years as nonemployees, and shall have filed any required Form 1099-NEC with the Internal Revenue Service with respect to those workers, consistent with the nonemployee treatment.
C. An eligible taxpayer that participates in the Fresh Start Proper Worker Classification Initiative agrees to prospectively treat the class or classes of workers identified in the application as employees for future tax periods and is not liable for any withholding tax, unemployment tax, interest, or penalties with respect to any amounts paid to any workers before the date on which the taxpayer is accepted for participation in the Fresh Start Proper Worker Classification Initiative.
D.(1) An eligible taxpayer that wishes to participate in the Fresh Start Proper Worker Classification Initiative shall submit an application for participation in the program to the Department of Revenue. The Department of Revenue shall contact the taxpayer or authorized representative to complete the process once it has reviewed the application and verified the taxpayer's eligibility.
(2) An accepted application constitutes a joint closing agreement between the taxpayer and the Department of Revenue and the Louisiana Workforce Commission.
(3) The closing agreement shall constitute confirmation by the taxpayer to treat the class or classes of workers identified in the application as employees.
(4) The closing agreement becomes effective on the date that the taxpayer receives notice from the Department of Revenue that the taxpayer's application is accepted.
E. The employers identified in this Subsection shall not be eligible to participate in the program:
(1) Employers who are currently under audit concerning the classification of the classes of workers by the Internal Revenue Service, the United States Department of Labor, or by a state government entity.
(2) Employers who are contesting in court the classification of the class or classes of workers from a previous audit by the Internal Revenue Service, the United States Department of Labor, the Department of Revenue, or the Louisiana Workforce Commission.
(3) Employers who have withheld Louisiana state income taxes from the amounts paid to any worker and who have not remitted the tax to the Department of Revenue.
(4) For the purposes of Paragraphs (1) and (2) of this Subsection, a taxpayer that is a member of an affiliated group within the meaning of Section 1504(a) of the Internal Revenue Code if any member of the affiliated group is under an employment, withholding, or unemployment tax audit.
F. The Department of Revenue shall have the authority to promulgate rules and regulations for the administration of the Fresh Start Proper Worker Classification Initiative.
Acts 2021, No. 297, §1, eff. Jan. 1, 2022.