LAFAYETTE —The City-Parish Council on Tuesday voted to move forward a proposal to end a sales tax rebate that helps businesses cover accounting expenses related to collecting the tax.
A final vote is set for Feb. 5.
Businesses are allowed to keep 2 percent of total collections for city-parish government sales taxes as long as the sales tax payment is on time.
Ending the rebate could bring in an additional $1.5 million a year for city-parish government — about $1.4 million from the 2 percent city of Lafayette sales tax and $100,000 for the 1 percent parish government sales tax collected in the unincorporated areas outside of Lafayette, according to figures from city-parish government.
City-Parish Councilman Jay Castille, who is sponsoring the proposal, said in an interview last week that ending the rebate could help shore up the city-parish budget.
He also said that the tax rebate could be a violation of a state laws that prohibit local government from giving money, services or other things of value to private individuals or businesses.
The Greater Lafayette Chamber of Commerce has not taken a position on the issue.
The Lafayette Parish School Board ended a similar sales tax rebate program in 1994, followed by Youngsville in 1999 and Carencro and Scott in 2011.
In other business, City-Parish Attorney Mike Hebert told council members that a decision is expected “very shortly” on a request by city-parish government that a judge toss out a lawsuit brought by Broussard challenging Lafayette’s annexation of more than 200 acres in southern Lafayette Parish.
A court hearing on the issue was held Tuesday morning.