5.26.22 – Business Report – A state constitutional amendment seeking to streamline Louisiana’s decentralized sales tax system is pending in this year’s session.
Voters shot down a similar measure last year, so even if the Senate approves the House-passed bill, change is by no means assured. However, two bills that have passed the Senate could address some of the complaints business owners have about the current system, though local authorities would have to opt in.
Senate Bill 95 by Sen. Bret Allain, R-Franklin, who chairs the Revenue and Fiscal Affairs Committee, calls for the Uniform Local Sales Tax Board to create a multi-parish audit program for local sales tax. Companies that do business in multiple jurisdictions can face multiple audits of their sales tax collections. That can be expensive and time consuming for the businesses, though many local officials are reluctant to give up that right.
“You’re banking on the hope that the local parishes will opt in,” says Jason DeCuir, a consultant who works with lawmakers on tax issues. “But until the constitution’s changed, you can’t force it.”
Allain’s Senate Bill 235 would allow local officials to opt into having all their taxes collected by the Remote Sellers commission, which collects sales taxes on online sales. Again, it’s a statutory way to simplify the system somewhat without changing the constitution, DeCuir says.
DeCuir, who began his career as a practicing tax attorney and spent three years with the Louisiana Department of Revenue, says there’s a good chance Louisiana’s system eventually will be found unconstitutional under the U.S. Supreme Court’s Wayfair standard. The fact that state officials felt the need to create a centralized collector for online sales taxes indicates the main system is too complex, he suggests.