Thursday, June 20, 2024

Louisiana House speaker proposes centralized sales tax amendment

by BIZ Magazine

By David Jacobs | The Center Square

The speaker of the Louisiana House filed legislation Wednesday to streamline state sales tax collection.

The change would require amending the state constitution, meaning at least two-thirds of the members of the state House and Senate and a majority of voters would have to approve the change.

Louisiana is one of only three states without a single state sales tax collector. Business advocates say the decentralized system is difficult to navigate.

Local government officials, however, long have guarded their ability to collect their own sales taxes, saying it was the best way to ensure the money is spent the way local voters and taxpayers want it spent.

House Speaker Clay Schexnayder filed legislation last year that created a task force to study centralizing sales tax collection. That group proposed creating a statewide entity that would oversee state and local sales tax collections and take over the duties of two existing boards focused on internet sales taxes and resolving disputes between taxing entities.

One of the biggest sticking points for the group, which included representatives of state and local government as well as business, was deciding how the new entity would be governed. Schexnayder’s bill proposes an eight-member board evenly divided between state and local government.

State associations representing school boards, municipalities, police juries and sheriffs each would appoint a member. So would the governor, the state revenue department (which answers to the governor), the House speaker and the Senate president.

Local leaders also have been concerned about losing their right to audit taxpayers in their jurisdictions. While local leaders say they know best whether a business in their backyard needs to be audited, business owners don’t want to be subjected to multiple audits by different jurisdictions.

The proposed commission would serve as the “central audit entity” for taxpayers without a physical presence in the state and would be charged with developing rules to “streamline the audit process” for other taxpayers.

The Louisiana Sales and Use Tax Commission for Remote Sellers, which handles internet sales taxes and sales for other taxpayers outside the state, and the Uniform Local Sales Tax Board, which helps to resolve disputes, would be abolished.

The change will ensure Louisiana is compliant with the U.S. Supreme Court’s South Dakota v. Wayfair Inc. decision, proponents said.

“For the better part of the last year we have been working closely with local and state partners to come up with a solution to our outdated sales tax collection system,” Schexnayder said in a prepared statement. “That hard work has paid off with the introduction of this constitutional amendment.”

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