Louisiana Tax Refund: Bill Addresses Check or Prepaid Debit Card Debate

March 31, 2014
Times-Picayune (New Orleans) 
The Louisiana House Ways and Means Committee has passed a bill by Rep. Jim Fannin (R-Jonesboro) that would change the default method by which people receive their tax refunds. The measure now goes to the full House for a vote.

Louisiana can get their refunds through direct deposit, paper check, or a debit card. Filers who do not choose a particular method on their tax forms automatically receive a debit card, but Fannin wants people to automatically receive a check instead. Last year, a security breach involving state-issued debit cards caused the exposure of thousands of Louisiana residents' personal information. Fannin believes the paper check option is safer.

Department of Revenue Secretary Tim Barfield, however, says his agency sees more fraud with paper checks than with debit cards. Checks also are slightly more expensive for the agency to produce. A bank currently provides the debit cards to Louisiana for free, while the Department of Revenue has to pay about 60 cents for every tax refund check it issues. Barfield said some Louisiana residents dislike checks because they must pay a check-cashing fee to access their money. The debit cards also include some fees, especially when people do not have access to the card-issuing bank's ATM. Although direct deposit is the most popular choice for receiving tax refunds, not all taxpayers have bank accounts.

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