The Louisiana speaker’s House-passed bill to centralize the collection of sales taxes attracted a lot of questions and some trepidation – as it has all through the process – but after a wording change, the Senate Revenue and Fiscal Affairs committee members advanced the legislation for a full vote by their colleagues.
At its center is the creation of a State and Local Streamlined Sales and Use Tax Commission, manned by state and local officials equally, that would collect taxes on sales, then distribute the appropriate amount to the appropriate taxing entity. This fairly simple concept is still fraught with worry for many.
The House approved more than a dozen amendments two weeks ago and the Senate committee added more changes Monday to House Bill 199, which is sponsored by House Speaker Clay Schexnayder, R-Gonzales.
For generations municipal and parish governments, school boards and sheriffs, along with myriad of other agencies have collected their own taxes – it's in the Constitution. The state is charged with the authority to collect state sales taxes, not taxes for local agencies. The system, complicated though it is, has worked fine for years. On the other hand, nearly every other state in the nation has moved into a centralized system that collects and disperses sales taxes for both state and local agencies. Louisiana's business community and state legislators have argued for years that centralized collections is more efficient and would collect more revenues. But past efforts ran into opposition from parish and local governments wary of the state gathering all the bucks and distributing the money in the state’s own good time.
A business-backed effort to centralize Louisiana's sales tax collections began Tuesday working its way through the state House, where Republic…
This go-around Schexnayder sought input from the locals, rather than just telling them what was in the bill. Unlike their frenetic opposition of past years' efforts, the municipalities and parishes aren’t against HB199 but aren’t really rallying for it either.
The legislation is a two-step process. The first would change the wording in the state Constitution to allow for the creation of the commission. That would require majority approval in a statewide vote in October. Before that vote happens, two-thirds of each chamber would need to back the legislation. If all those votes are accomplished and the new system becomes law, the commission and Legislature would need to write, then pass rules and laws that create the new structure and processes for collecting and distributing sales taxes.
Some lawmakers worried what would happen between the two steps, particularly if the second is delayed. The Senate committee added wording to HB199 that would retain the status quo: the state collects state taxes and the local jurisdictions collect their taxes in the interim.
Iberville Parish, which relies of sales taxes for 75% of its revenues, raised concerns about the wording of how audits would be handled in the new system.
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Under the present system, local agencies are allowed to audit brick and mortar shops to double-check that the amount of self-reported taxable sales is close to reality. HB199 includes wording that the audits “shall” be handled by the state, though supporters of the legislation argue that the bill is supposed to mean that the new commission “shall” come up with the rules under which state and local auditors would operate. Senators on the committee said they would look at making the wording clearer before advancing the bill without objection.
Additional changes are expected before the legislation goes before the full Senate in a few days.
If approved by 20 of the 39 senators, HB199 then would have to return to the House, where 70 of the 105 representatives would have to vote in favor of the amendments added in the Senate.