Current through Register Vol. 50, No. 9, September 20, 2024
A.
General Description
1. The Mobile Workforce
Exemption allows certain nonresident mobile workers to exclude wages from
Louisiana tax table income. The exemption further relieves employers of such
nonresident employees of the requirement to withhold Louisiana individual
income tax on the nonresident employee's wages.
2. To be eligible for the exemption, all of
the following requirements must be met:
a.
The compensation is paid for employment duties performed by the nonresident
individual in this state for 25 or fewer days in the calendar year.
b. The nonresident individual performed
employment duties in more than one state during the calendar year.
c. The wages are not paid for employment
duties performed by the nonresident individual in the individual's capacity as
a professional athlete, staff member of a professional athletic team,
professional entertainer, public figure, or qualified production
employee.
d. The nonresident
individual's income is exempt from taxation by this state under the United
States Constitution or federal statute or the nonresident individual's state of
residence either provides a substantially similar exemption or does not impose
an individual income tax.
e. The
nonresident individual did not have any other income derived from sources
within the state during the taxable year.
B. Definitions. For purposes of this Section,
the following terms shall have the meaning ascribed therein.
Day-an employee is considered present and
performing employment duties within Louisiana for a day if the employee
performs more of his or her duties within Louisiana than any other taxing
jurisdiction for that day. Where an employee is present and performing more
employment duties in Louisiana than another taxing jurisdiction on the same
day, the employee will be considered to have performed the preponderance of his
or her duties for that day in Louisiana. The portion of a day that an employee
spends in Louisiana while in transit is not considered in determining whether
he or she performed employment duties.
Department-the Louisiana Department of
Revenue.
Employee-as defined in
R.S.
47:111(A), with the
exception of a professional athlete, staff member of a professional athletic
team, professional entertainer, public figure, or qualified production
employee.
Employer-as defined in
R.S.
47:111(B).
Time and attendance system-a system through
which an employee is required, on a contemporaneous basis, to record the
employee's work location for every day worked outside the state where the
employee's employment duties are primarily performed and that is designed to
allow the employer to allocate the employee's compensation for income tax
purposes among all states in which the employee performs employment duties for
the employer.
C. Filing
Requirements.
1. Employees
a. Nonresident employees seeking to claim the
exemption for income earned while performing employment duties within the state
for less than 25 days are not required to file a Louisiana individual income
tax return. If the nonresident employee has other income from Louisiana
sources, the nonresident employee does not qualify for this exemption and thus
all Louisiana income must be reported on the Nonresident and Part-Year Resident
(NPR) Worksheet of the Louisiana Form IT-540B, Louisiana Nonresident
and Part-Year Resident Income Tax Return.
b. Nonresident employees must file Form L-4E,
Exemption from Withholding Louisiana Income Tax with their
employer in order for their employer to refrain from withholding Louisiana
income tax from their wages. Taxpayers must file a new L-4E annually in order
to continue claiming the exemption and must revoke this exemption certificate
by completing a Form L-4,
Employee Withholding Exemption
Certificate:
i. within 10 days from
the twenty-sixth day of performing employment duties within the
state;
ii. within 10 days from the
day you anticipate you will incur Louisiana income tax liability for the
current year; or
iii. by the first
day of the last month of your current taxable year if you anticipate you will
incur Louisiana income tax liability for the following year.
2. Employers. If a
nonresident employee performs employment duties in excess of 25 days within the
state, the employer must begin withholding income tax and report such tax on
Form L-1, Employer's Quarterly Return of Louisiana Withholding
Tax beginning in the period in which the twenty-sixth day fell
within.
D. Penalty for
Failure to Deduct or Withhold Income Tax
1.
The Department shall not require the payment of penalties or interest for
failing to deduct and withhold income tax for a nonresident employee who does
not qualify for the exemption, if the employer meets any of the following
conditions:
a. The employer at its sole
discretion maintained a time and attendance system specifically designed to
allocate employee wages for income tax purposes among all taxing jurisdictions
in which the employee performs employment duties for the employer, and the
employer relied on data from that system.
b. The employer did not maintain a time and
attendance system, and the employer relied on either:
i. its own records, maintained in the regular
course of business, of the employee's location;
ii. the employee's reasonable determination
of the time the employee expected to spend performing employment duties in this
state provided the employer did not have actual knowledge of fraud on the part
of the employee in making the determination and provided that the employer and
the employee did not collude to evade taxation in making the
determination.
2. The department shall require the payment
of penalties or interest for failing to deduct and withhold income tax if the
employer fails to meet either of the conditions of this Subsection.
AUTHORITY NOTE:
Promulgated in accordance with
R.S.
47:112.2,
R.S.
47:242(1)(ii),
R.S.
47:248, and
R.S.
47:1511.
