The House Ways and Means Committee essentially defeated legislation Monday afternoon that would have drastically changed the way in which Louisiana’s various governmental bodies collect revenue. HB57 by Rep. Tanner Magee, R-Houma, was a proposed constitutional amendment that would have charged the state Department of Revenue with collecting all sales taxes, removing those powers from municipal and parish governments.
According to the bill’s author, the centralization of sales tax collections in Baton Rouge is necessary for the state to handle commerce in the digital marketplace. As Magee noted in his testimony, the U.S. Supreme Court’s ruling on online transactions mandates that state governments collect tax revenues themselves.
“It is what every other state is doing,” he said. “This is the modern economy.”
It is worth noting that the measure would have moved the Department of Revenue to strictly handle collections and then disperse the money to parish and municipal governments. Magee noted that no local entities would lose revenue under his plan. “We’re not trying to take their money away from them,” he said.
Magee’s bill was supported by groups such as the Louisiana Association of Business and Industry, the state chapter of the National Federation of Independent Business, the Council For A Better Louisiana, the Public Affairs Research Council and the Baton Rouge Area Chamber. “We ultimately think this is where we are going to end up,” testified LABI’s Jim Patterson, referring to the measure.
After some further testimony, Magee agreed to voluntarily defer the bill, offering to meet with representatives from local governments in order to work out a compromise solution. He told the committee that he plans to bring the bill back for debate next year.
“I think we need to get the buy-in from local governments so they can have their issues addressed,” he said.