GONZALES — Ascension Parish government is moving to gain exemptions from state and local sales taxes for two major drainage projects and potentially other future capital projects, parish officials said.
The Parish Council adopted a resolution last month clearing the way for contractors it hires to be excused from paying sales taxes on materials and supply purchases used on public works projects.
The East Ascension Drainage Board, which is composed of 10 Parish Council members, is expected to consider the same exemption early next month, parish officials said.
The board is planning to start construction on two drainage and flood protection projects costing a combined $38 million. One is a $17 million pumping capacity expansion at the Marvin J. Braud Pumping Station and the other is a $21 million levee, floodgate and pumps project at Henderson Bayou.
Each of the projects ranks among the largest single capital expenditures by parish government since the original Marvin Braud pump station was finished in 1991.
In 2011 dollars, construction of the original station cost about $18.5 million after being adjusted for inflation.
East Ascension Drainage Director Bill Roux said in an emailed response to questions the exemptions will save the drainage district an estimated $500,000 in sales taxes on each of the projects.
He said the exemption, which the council backed by resolution July 21, was sought for the two capital projects.
He said the exemption could be applied to other capital improvement projects, if the council wished.
“Major savings are realized in multimillion-dollar capital projects where many subcontractors are used and millions of dollars of purchased material are needed,” he added.
The exemption is based on a state law that exempts cities, parishes and other political subdivisions from sales taxes under certain conditions.
Governments can extend the exemption to their contractors on public works projects by designating them as their agents, according to state law.
Ascension’s per-dollar exemption would include four cents for the state, two cents for the parish, two cents for the School Board and a half-cent for the sheriff.
Roux noted such exemptions already are standard procedure for the school system, “since their projects are the construction of schools costing millions of dollars each.”
School system spokesman Johnnie Balfantz said the system has no issue with the parish’s seeking the exemption.
He said the system has been using the exemption for at least 10 years on school construction projects of more than $1 million. Balfantz said the exemption has been applied to a half-dozen recently built schools.
“They don’t pay the sales taxes, and we don’t either. You essentially are getting a better price for constructing a project,” he said.