BATON ROUGE, La. (AP) — A business-backed effort to centralize Louisiana’s sales tax collections began Tuesday working its way through the state House, where Republican leaders are pushing to get rid of the state’s unusual system of letting a hodgepodge of local government agencies do the collection work.
House Speaker Clay Schexnayder, a Republican from Gonzales, has made the centralization proposal his top priority for the two-month legislative session, and it’s the main tax push from the powerful Louisiana Association of Business and Industry.
In Louisiana, parish officials ranging from sheriffs to school boards collect sales taxes charged on purchases and owed by businesses, with 58 separate entities involved. Schexnayder’s constitutional change would start the process to centralize electronic sales tax filings and have them handled by an eight-member commission.
The House Ways and Means Committee voted 14-1 for the proposal, its first of likely two committee reviews before a full House debate.
Supporters say Louisiana is one of only three states with a fragmented system, and they argue it makes bookkeeping more confusing, cumbersome, and expensive for businesses that have to file taxes across parishes. They also say it complicates efforts to collect sales taxes from online purchases.
“This bill would help our small businesses,” Schexnayder said.
He also said the centralization would help ensure all taxes owed are collected by better tracking the work.
Beyond business organizations, several government watchdog groups and tax experts have urged consolidation of the sales tax collections.
The legislation has high hurdles for passage, requiring two-thirds support from the House and Senate and backing from voters in a statewide election. And if the constitutional amendment is approved, lawmakers still would have to work out details before the centralization work begins.
Efforts to consolidate the sales tax collections have been proposed and scrapped in prior years amid opposition from local government officials who don’t necessarily trust the state to properly collect and allocate the dollars owed to municipalities that pay for their operations in a timely fashion.
But Schexnayder’s commission proposal — recommended after months of study by a task force — would give the local school boards, municipal, sheriffs and police jury associations each a seat on the commission. That has decreased any vocal opposition, at least so far.
“I think we have a good compromise in front of us,” said Jefferson Parish Sheriff Joe Lopinto, a Republican former lawmaker.
The state revenue department, the governor, the House speaker and the Senate president would each appoint one of the remaining four commission members.
The commission would act as the single collector of all electronically filed sales taxes across Louisiana, including local sales taxes levied by parishes, cities, and other municipalities. But many of the follow-up regulations governing the commission would still have to be worked out.
That sets aside some of the more contentious matters for a future debate if the constitutional amendment passes.
As Schexnayder is seeking to take away tax collection work from some parish sheriffs, he’s proposing to increase the dollars sent to sheriffs for housing state inmates by $23 million a year — an approach that also could ease some opposition.
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