SHREVEPORT, La. (KTAL/KMSS) Caddo District Judge Mike Pitman today ruled in favor of a class action lawsuit that will force the City of Shreveport to pay commercial water and sewer customers an estimated more than $2.5 million in taxes illegally collected over the past three years.
The lawsuit, filed in August 2018 by three local commercial water and sewer customers, claimed the city continued to collect a sales tax on commercial water bills for three years after the tax was suspended.
Originally, the sales tax was levied on quantity of water used, along with sewer usage and other non-water consumption. But the state dropped all but the water usage tax in July 2015.
Shreveport, however, continued to levy the sales taxes on all the previously taxed items, but only sent the money collected for water usage to the state.
Although the city claims the illegal collections were inadvertent, the lawsuit alleged the city “knowingly and intentionally overcharged its commercial and industrial water customers.”
Although the problem was pointed out to the city in February 2018, nothing was done. Then, in a May 14, 2018, letter to then Shreveport Mayor Ollie Tyler, Shreveport attorney Jerry Harper who represents the plaintiffs, asked that the city acknowledge the overcharges and publicly advise customers they would be refunded.
After the city continued to resist, the lawsuit was filed in August and has been making its way through the courts ever since.
After today’s ruling, Harper told NBC6/FOX33 it would take two-to-three months to calculate exactly how much the city will have refund businesses who paid the discontinued taxes.
In addition to refunding commercial customers, the City of Shreveport will be liable for attorney’s fees and related costs.
Another class action lawsuit claiming the city improperly over billed customers is still winding its way through the courts.