When Louisiana does something differently from just about any other state, that may mean we are special.
But when it comes to politics driving basic administrative and business decisions, we’re special in a very ungood way.
Two Republican candidates for governor recognize the need for drastic change in sales tax administration, but unhappily, that view is not shared by incumbent Gov. John Bel Edwards.
Louisiana is one of three states where local jurisdictions — about 370 of them, each with a different tax rate — have similar authority to levy and collect their own sales taxes from brick-and-mortar establishments, though mostly the taxes are collected on a parish level. Louisiana’s constitution gives local jurisdictions the authority to collect local sales taxes.
Businesses call the system an administrative quagmire. And it is very difficult to move to a centralized administrative scheme because of political jobs in each parish.
Local authorities, typically school boards or sheriffs, have their own sales tax offices. Some of those jobs would almost certainly go away if a standard process were to be established, as in most states.
The costs are in administration in many businesses, but that is hidden from the consumer. The benefits to local politicos are in very visible payrolls.
The business community has argued for years that this problem ought to be addressed. The cause of political patronage has always won out.
Edwards sided with local authorities when he told sheriffs he had ordered drafting of legislation ensuring local jurisdictions retain their ability to collect their own sales taxes. This seems to try to further enshrine a bad system in law so that it cannot be changed in future.
We agree with U.S. Rep. Ralph Abraham, R-Alto, running against Edwards in the October primary, who said that “our current system has put Louisiana at a competitive disadvantage.”
Abraham and Eddie Rispone, a Baton Rouge businessman also running for governor, agree that a comprehensive shift is necessary.
A 2018 decision of the U.S. Supreme Court gave states the ability to collect sales taxes from website sellers in different states. States wanting to collect taxes on sales over the internet needed to adhere to reasonable standards for out-of-state vendors. One of those recommendations was to use a centralized collection system.
The Louisiana Sales and Use Tax Commission for Remote Sellers earlier this year came up with a system that would use computer software to calculate sales taxes, based on the ZIP code of where the purchase is sent, then send the proceeds to state and local authorities. But that's only for internet sales. The discussion has led to renewed efforts to consolidate collections for sales in brick-and-mortar stores as well.
It's only common sense to do so. Can 47 other states be going that far wrong?