LOCAL ALTERNATIVE DISPUTE RESOLUTION POLICY
PURPOSE: To provide procedures by which a taxpayer may seek resolution of a dispute when it is subject to a claim for local sales/use tax by one or more taxing authorities or between two or more taxing authorities claiming the right to the local tax on identical transactions. The use of the process is intended to provide an alternative to the parties of the dispute in an effort to alleviate the need for litigation, and establish precedence for future disputes with similar or identical issues of fact and/or local sale tax law.
Arbitration – a process by which parties to a local tax dispute submit evidence to a panel of arbitrators who conduct a hearing, receive evidence and arguments of the parties and issue a written decision which is final and not subject to appeal.
Arbitrator – individual chosen by parties to a local tax dispute from a registry of arbitrators appointed by the LATA Board of Directors
Mediation- a non-binding process in which parties to a local sales/use tax dispute submit issues of fact or law to a mediator, selected jointly by the parties, whose function is to try and get both parties to reach an amicable agreement.
Mediator- individual selected by parties engaged in a local tax dispute, who is authorized to serve as an intermediary in resolving the dispute
Party- a taxpayer, taxing authority or any other person having a pecuniary interest in a dispute which is subject to a mediation/arbitration process
Hearing- a proceeding by which an arbitration panel reviews documents, takes testimony or otherwise receives information relative to the dispute which is subject to arbitration
REGISTRY OF MEDIATORS/ ARBITRATORS
The Board of Directors shall annually appoint a registry of not less than ten (10) mediators/arbitrators, whose qualifications shall consist of being Board Certified Tax Administrators. In the event that there are less than ten Certified Tax Administrators available for such appointment, the Board may select any local administrator with a least five (5) years experience in sales/use tax and who is also a member of the Association. In addition the LATA ‘s Business & Industry Committee shall also appoint five (5) LATA associate members to the registry, whose qualifications shall consist of at least five (5) years of experience in local sales/use tax compliance at a management level position.
Should the tax area subject to dispute be other than sales/use tax (occupational license, insurance premium, or ad valorem), the Board of Directors may add any member of the Association with equivalent qualifications in those tax areas to the registry as the need arises.
Any taxpayer who receives notification of additional tax due resulting from an audit or any proposed assessment for a sales tax deficiency for any other reason may request the taxing authority to participate in an arbitration process. The parties must agree in writing to (1) submit to the policy and procedures of the process and (2) to be bound by the decision of the arbitration panel. Such agreement must be signed by officials who have authority to make such agreements and bind their respective parties to the outcome of the process.
The party (or parties) shall notify the President of the LATA, by submission of a statement to the Association’s Secretary-Treasurer summarizing the issue(s) in dispute, the amounts involved, and the status of the assessment, the identity of other parties affected and request the process be initiated. The notification must include a notarized copy of the agreement to participate in and be bound by the process results.
The President shall not sanction any arbitration agreement involving an assessment which has become final under the provisions of the Uniform Tax Code nor which is the subject of any pleading before a court of competent jurisdiction at the time of the notice.
Likewise any two or more taxing authorities, which are in dispute as to which jurisdiction is legally owed a local sales tax, may initiate the arbitration process in the identical manner required for that of a taxpayer/taxing authority dispute.
SELECTION OF ARBITRATION PANEL
Within ten days of the notice to abide by arbitration tendered to the President, the parties shall each select one arbitrator from the Arbitration/Mediation registry and subsequently notify the President of their selection. The two arbitrators selected will then jointly agree on a third arbitrator to complete the panel. The President shall then appoint one of the three as the Chief Arbitrator.
SUBMISSION OF ARGUMENTS/ SCHEDULING OF HEARING:
The Chief Arbitrator shall contact each identified party with a request for the submission of detailed statements of fact and/or law in support of their position, to be provided the panel and simultaneously to all other participating parties within thirty (30) days of the date of the notice. The Chief shall provide panel members with copies of the submissions for their review upon receipt from the parties.
After consultation with the panel, the Chief shall contact the parties for the purpose of scheduling a hearing to further address the issues cited in the petition. All parties shall agree to the date, time and place of the hearing. Failure to agree on a hearing date after three scheduling attempts by the Chief Arbitrator, within sixty days of the first attempt, shall vest authority with the Chief to cancel the proceeding.
However, by agreement of all the parties, the necessity of a hearing may be waived, and the issues decided on the merits of the written statements originally tendered by the parties. In such cases, the panel may request additional documentation, statements, or submissions necessary for a proper ruling.
On the scheduled date, all parties shall appear and present final arguments, witnesses, and submissions related to the petition. The Chief Arbitrator shall determine the order of presentations. The Chief may also request the attendance and participation of any other party who may possess knowledge of the subject matter, which will aid in resolution of the matter before the panel. The general order of the hearing shall be as follows:
(a) Taxpayer presents their case
(b) Taxing authority presents their case
(c) Each party is allowed a rebuttal argument, which duration shall be at the discretion of the Chief Arbitrator.
(d) The panel will advise the parties of their ruling in writing, not later than 30 days following the conclusion of the hearing.
Each party shall provide sufficient copies of all written submissions to the opposing parties not later than 15 days prior to the date of the hearing.
RULING OF THE PANEL:
After due deliberation of the statements, documents and other considerations before it, the panel shall issue a written ruling on the petition submitted, with reasons for their conclusions. Such ruling shall be rendered within thirty (30) days of the conclusion of the hearing, or within the same delay, in the absence of a hearing.
Rulings must be by affect of a majority opinion of panel, however any dissenting panel member may submit reasons for dissent from the majority.
Redacted versions of such rulings shall be published by the Association and retained for future reference and guidance on similar or identical issues that arise in the future.
Copies of the ruling shall be provided each affected party. The President of the Association shall report to the Board of Directors the status of each case in progress at its regularly scheduled meetings.
Any one taxpayer who is aggrieved by the findings of any one or more taxing authority, upon receipt of a proposed assessment, may initiate the mediation process by petitioning the President of the Association in the same manner required for the arbitration process. However, in lieu of nomination of arbitrators, the parties, within 15 days of notice of acceptance by the President, shall jointly agree to the nomination of one mediator from the registry to facilitate the process.
Upon receipt of the name of the nominated mediator, the President shall confirm his/her availability for the process and notify all parties that the mediation may begin.
The mediator, within 30 days of appointment, shall contact the parties to initiate discussion of the issue(s) in dispute. The mediator may conduct joint or separate meetings with the parties. The function of the mediator is to informally facilitate discussions, which could lead to an amicable resolution of the issues.
Failing to do so within a reasonable amount of time, the mediator shall advise the President that such efforts have not succeeded and request to be released from mediation responsibility. Successful efforts should also be reported to the President in writing with a similar request to terminate the process. However, said report details will not be subject to publication by the Board.
Each named party involved in the arbitration/mediation process shall bear its own respective costs of providing any necessary documentation, witness fees, travel, or other expenses it incurs by reason of the process.
All parties shall consent, as part of its submission to participate in the process, to bear a pro rata share of any reasonable and necessary expense incurred by a mediator or arbitrator in the execution of the dispute resolution process. Documentation of such expenses shall be provided to the affected parties.
Costs associated with providing an accurate record of any hearing will be born by the Association (e.g., tape recordings, ruling copies to Board members).
CONFIDENTIAL NATURE OF PROCEEDINGS
Unless expressly waived by the parties involved, the confidentiality of all documentation, testimony, or other submissions, shall be preserved under the provisions of LRS 47:1508, Confidentiality of Taxpayer Records.
It is expressly prohibited for any party to the proceedings to have communications with any arbitrator/mediator except during official proceedings of the process. Likewise arbitrators/mediators shall not discuss the proceedings with anyone other than the parties.
All hearings or other discussions shall be considered private and only panel members and parties may attend sessions or have access to records of such proceedings.
EFFECT ON PRESCRIPTION
Except as to a separate agreement in writing under the laws governing the prescription of taxes, no filing, pleading or other action of any party pertaining to the exercise of any dispute resolution process shall serve to affect such prescription of taxes. It is the responsibility of each party to lawfully protect their right to collect any tax that may be in dispute, regardless of their reliance on this procedure. Because extensions can be requested and granted for the purposes of filing a protest in the proposed assessment stage, the parties can considered arbitration/mediation agreements during this time frame. However, once a formal assessment is issued, the taxpayer must respond within finite time frames to contest the assessment, i.e. payment under protest. For this reason, consideration of alternative dispute resolutions is not recommended once this type of assessment has been issued.