MONROE, La. – An association of cities has taken a neutral stance on a reform bill designed to streamline Louisiana’s complex sales and use tax system and simplify compliance rules for businesses.
“Right now we’re remaining neutral on the bill but continuing to work with all parties involved,” John Gallagher, executive director of the Louisiana Municipal Association, told the Louisiana Record.
The association’s legislative committee met this week and decided to remain neutral on House Bill 199, authored by House Speaker Clay Schexnayder (R-Gonzales), suggesting that some members approve of the plan and some do not, according to Gallagher.
“Of course our main concern is to preserve local authority – local control – over the collection of sales taxes,” he said, adding that lawmakers will be reviewing details of the proposed constitutional amendment in the coming week as this year’s legislative session gets under way.
Currently, political subdivisions within parishes agree to a single tax collector or collection panel to collect and divvy up the revenues within the parish. Businesses, however, have complained that having a patchwork of collection systems statewide creates undue burdens.
The Speaker’s Office maintains that having a more unified collection system under the auspices of a new State and Local Streamlined Sales and Use Tax Commission would bring Louisiana more in line with other states, make the state more competitive, lower compliance costs, and provide more transparency and accountability.
The new commission would more efficiently collect sales state and local sales taxes and ensure that the state complies with the U.S. Supreme Court’s South Dakota v. Wayfair decision dealing with taxing remote or online sales of products, supporters say.
The Louisiana Municipal Association sees benefits of using existing technology to simplify the current system, so long as local agencies retain their control and revenues don’t go into state coffers, Gallagher said.
“What we think makes the system so complicated is the 200-plus exemptions and exclusions that the legislature has granted over the years,” he said.
The association will remain engaged on the issue as the House Ways & Means Committee discusses the proposal and will work cooperatively with the speaker and businesses about changes to the current system, according to Gallagher.
The proposed constitutional amendment requires a two-thirds vote of the legislature. To take effect, it would need to get voter approval during a statewide vote on Nov. 8, 2022.
