Capitol Views: Can online purchases solve the budget stalemate?
Lawmakers, lacking votes on any of the proposed sales tax rates, find themselves again in a gridlock that could be fatal to the latest special session.
But the new U.S. Supreme Court ruling, which has already prompted Rep. Stuart Bishop, R-Lafayette, to withdraw his sales tax legislation from Thursday’s floor debate, could change that.
The South Dakota v. Wayfair case ruling would allow internet retailers to collect sales taxes where they do not have a physical presence. Generally, internet retailers are not required to charge sales taxes for online purchases. If sales taxes are implemented, states could expect more revenue.
This is badly needed by Louisiana, which faces cuts to higher education, prisons and other entities due to an ongoing, unsolved budget shortfall.
Without enough support for any sales tax proposals brought forth thus far, lawmakers have been left hoping a stalemate-solving “rabbit out of the hat” would appear before the final hour.
Some, like Sen. Conrad Appel, R-Metairie, seem to think the court ruling is the rabbit.
“This changes everything, if the numbers are right,” said Appel, who expects the new ruling to increase the revenue in the long term. “It’s going to be a lot (of revenue) no matter what. Why would you raise sales taxes for more than one year, assuming it will take one year for it to kick in?”
The Senate is also waiting for a fiscal note based on the ruling that indicates how it could affect the state.
“We can only budget based upon (Revenue Estimating Conference) estimates, which are based upon fiscal notes,” said the governor’s executive counsel Matthew Block.
Right now, the Legislature has neither.
“We’re waiting to see what it would take to make a compromise with the House,” said Senate President John Alario, R-Westwego, adding that he does not know when such a fiscal note would be released.
Others are skeptical.
“This doesn’t mean we should be throwing a parade because all of our problems are solved,” said Speaker Pro Tem Walt Leger, D-New Orleans, who sponsored related legislation in the last special session. “It really doesn’t make sense that we would insert this into the conversation today.”
Jeremy Alford will publish a daily update throughout the legislative session on Daily Report PM. Alford reports on Louisiana politics at LaPolitics.com. Follow him on Twitter, or on Facebook. He can be reached at JJA@LaPolitics.com
Editor’s note: An earlier version of this story reported Thursday marked the U.S. Supreme Court’s Quill Corporation v. North Dakota case ruling. In fact, the Court’s latest decision overruled the Quill Corporation v. North Dakota ruling.