LAC 61:I.1923 — Mobile Workforce Exemption

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 30 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 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 30 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 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 thirty-first 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 30 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 thirty-first day fell.
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.