Wednesday, June 12, 2024

Louisiana committee approves bill to create single tax collector

by BIZ Magazine

By David Jacobs | The Center Square

A Louisiana House committee advanced a possible constitutional amendment Tuesday to create a single statewide entity to collect sales taxes.

House Bill 199 is the session’s top priority for Republican House Speaker Clay Schexnayder, who is the bill’s author, and many business advocates. Though only one member of House Ways and Means Committee objected, some members and stakeholders expressed concerns that likely will be raised again as the legislation moves through the process.

Louisiana is one of only three states without a centralized sales tax collector. Companies that do business in multiple jurisdictions have to deal with – and potentially be audited by – multiple collectors. Small businesses, in particular, find it difficult to comply, business owners and advocates said.

Local officials have resisted a state takeover of sales tax collection, saying local control helps ensure taxes are spent the way local taxpayers and voters want them spent. Guy Cormier, who represents the Police Jury Association of Louisiana, said he was taking the “monumental” step not to oppose HB 199, in part, because local officials were allowed to participate in the task force that helped to create the bill.

Cormier, however, stressed local governments need to be able to trust they’ll get the tax revenue they need to function in a timely fashion, and he cautioned a single collector can simplify the process only so much. Businesses still will have to track the jurisdictions they sell into because what is or isn’t taxable, and at what rate, can vary, he said.

“Billions of dollars are collected,” Cormier said. “We need to make sure we get it as right as we can get it.”

Rep. Tammy Phelps, D-Shreveport, voted to advance the bill, which contains the language of the proposed constitutional amendment, but she said it “baffles me” the companion legislation that spells out the laws governing the new system was not yet available.  

Rather than letting the Louisiana Department of Revenue handle collections, Schexnayder’s bill creates an eight-member commission evenly divided between representatives of state and local government to oversee collection.  

The change would require a state constitutional amendment, which means it would need the support of two-thirds of the members of each chamber of the Louisiana Legislature and a majority of voters.

Stephen Waguespack, with the Louisiana Association of Business and Industry, said HB 199 isn’t a “dream bill” for anyone. Though it calls for the commission to develop rules to streamline the audit process for businesses, which is important for LABI, it doesn’t say how that would be accomplished.

The committee voted 14-1 to advance the bill. Rep. Jeremy LaCombe, D-Livonia, was the only member to object.

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