Louisiana governments at every level, in cities and parishes and the State Capitol, are heavily dependent on sales tax revenues.
Then why don’t we collect them better? Politics and entrenched local interests are part of the reason.
Ten states began charging sales taxes on internet purchases Monday, but Louisiana wasn't one of them because leaders are still working on efforts to modernize its collecting system.
We commend the members of the clunkily named Sales Tax Streamlining and Modernization Commission, who have been beavering away on this complex problem for several years.
And if all goes according to plan, Louisiana taxpayers could be charged sales taxes on online purchases by Jan. 1, 2019. The new system is being created through the Louisiana Sales and Use Tax Commission for Remote Sellers, under the Department of Revenue, at the Legislature's direction.
The U.S. Supreme Court’s June 23 South Dakota v. Wayfair ruling overturned a two-decade ban on taxing internet purchases from sellers in other states. Unless, of course, there were stores of the company in a state, so Louisiana taxpayers have contributed something to internet sales tax growth during that period.
Still, Louisiana’s system has been a mess for a long time. The nonpartisan Tax Foundation determined that Louisiana and Colorado would have the most hurdles to overcome before they could begin collections due to the states' "duplicative, outdated, inconsistent and inefficient" sales tax collection mechanism.
The state streamlining commission is discussing ways to make the sales tax system, which is currently operated on a parish-by-parish collection representing some 370 jurisdictions, more uniform across-the-board, said its chairwoman, state Rep. Julie Stokes, R-Kenner.
After three special sessions, the Legislature agreed to set the state sales tax rate at 4.45 percent. It had been 5 percent for the past two years and would have dropped to 4 percent on July 1 had the Legislature not approved the continued hike.
Stokes said that while legislators fought over what sales tax rate would help shore up the state's finances, many didn't notice that the state had effectively created some reform within the sales tax code by suspending many of the sales tax exemptions.
That’s progress, but not nearly enough. Louisiana is a long way from significant reforms, include a uniform collection system for sales tax. The problem is that local political jobs are at stake.
More exemptions ought to be whittled away, too. That is challenged, of course, by those having to pay more tax.
The plethora of taxing authorities that larger businesses in Louisiana have to deal with is a long-standing issue. Centralized collection, as the high court said, ought to be a goal for Louisiana’s leaders in this area of the law.