Thursday, May 30, 2024

Edwards signs bill to improve Louisiana’s sales tax collection system

by BIZ Magazine

By Victor Skinner | The Center Square contributor

A more streamlined system for Louisiana businesses to remit local sales taxes is on the way with legislation signed into law by Gov. John Bel Edwards this week.

New Iberia Republican Rep. Beau Beaullieu, sponsor of House Bill 558, told The Center Square Edwards’ signature on Wednesday will begin the process of shifting the local sales tax collection system from the Department of Revenue to the Louisiana Uniform Local Sales Tax Board.

The local board — comprised of members from the municipal, sheriffs’, police jury and school board associations — is expected to start work in January to design and implement a new system that will allow taxpayers to remit state and local sales and use taxes for all 54 of Louisiana’s taxing jurisdictions through a single location.

The Tax Foundation, the nation’s leading independent tax policy nonprofit, currently ranks Louisiana 48th out of 50 states for sales tax collections and complexity.

HB 558, now Act 375, follows a failed 2021 ballot initiative that aimed to create a separate body under the Department of Revenue to centralize sales tax collections to improve that ranking. Beaullieu’s legislation utilizes the existing Uniform Local Sales Tax Board to accomplish the same without increasing the size of government or costs for taxpayers.

“Everybody saw this as a solution to a multi-decade old problem we’ve had in our state,” he said. “Our business community is going to benefit drastically. Instead of 54 submissions, there’s going to be one.”

The effort will be funded through existing revenues collected by the Uniform Local Sales Tax Board, through fees from local tax collectors and motor vehicle sales taxes.

“We’re not increasing costs to the state when we do this,” Beaullieu said.

The Uniform Local Sales Tax Board will work with the Office of Technology Services next year to either select from existing available systems or develop a custom program, with the timeline for rollout between one and two years, depending on the route.

“The technology that they use now is not able to handle it,” Beaullieu said. “There’s technology in the marketplace they can utilize.”

Beaullieu contends the new system “also has the potential to save money for the local tax collectors across the state” by allowing many to eliminate third-party software currently used to collect taxes.

The new system “essentially accomplishes the same thing” and “still allows locals to maintain control of their taxes,” he said.

Jim Patterson is with the Louisiana Association of Business and Industry, which supported the bill.

He said “it’s been difficult” to work with local taxing authorities and characterized them as “uncooperative.” He noted the new system isn’t required to be up and running for two years and, “short term, the Department of Revenue will continue to manage this as it is.”

“This is a good step in the right direction and we’ll see if it manifests as intended,” Patterson said.

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