Capitol Views: Tax refunds for wrongly collected dollars could be on the horizon  

    The Senate moved this morning to send legislation to Gov. John Bel Edwards that could result in tax refunds for some Louisiana residents. Senate Bill 198 by state Sen. Barrow Peacock, R-Shreveport, would require the state Department of Revenue to return collected dollars in the event that a tax law is ruled unconstitutional.

    The bill’s author says he brought the measure because no current law requires the state to return revenues in the event of a court action. Peacock believes the disputed funds should be repaid rather than staying deposited in the state treasury. “People should be able to get their tax money returned and not pay a lobbyist and lawyers,” he said.

    The measure was actively supported by groups such as the Louisiana Association of Business and Industry, with Stephen Waguespack, LABI’s president, saying he viewed the proposal as a simple, common-sense measure. “This is the no-brainer of no-brainers,” he said. “It is only right to return money if the courts rule that the law is unconstitutional.”

    Some lawmakers, however, such as Revenue and Fiscal Affairs Chairman J.P. Morrell, D-New Orleans, argued against the passage of the bill, contending that the consequences could be catastrophic for future state budgets. Morrell contends that lawsuits could tie up future revenues, comparing the vote to the Legislature’s 2008 move to repeal the Stelly Tax Plan. “This is that Stelly vote,” he told his colleagues during the debate.

    Despite such pleas, the senators advanced the bill on a 24-11 vote. Worth noting is that Senate President John Alario opposed to the measure. The bill next heads to Edwards for approval or veto. The governor has yet to signal a position on the legislation.  

    Jeremy Alford will publish Capitol Views each afternoon on Daily Report PM through the end of the legislative session. The report is also available to subscribers at LaPolitics.com.  

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