A legislative study group recently issued a report to House and Senate leaders calling for a single constitutional amendment that would create a framework for a new centralized sales and use tax collection system in Louisiana.
The issue will be the top regular session priority of House Speaker Clay Schexnayder, who formed the Centralized Sales and Use Tax Administration Study Group. Schexnayder will carry the constitutional amendment, which has the full support of Ways and Means Chairman Stuart Bishop.
CSUTA Chairman Jason DeCuir of Advantous Consulting says the constitutional amendment establishes a single sales and use tax collection board that would be permitted to:
• Collect state and local sales and use tax;
• Function as a statewide political subdivision;
• Receive funding through state and local sources of revenue.
While there would be several moving pieces left to hammer out, such as board control and audit functions, successful passage would mean that business owners would have just a single source of contact for paying sales taxes in Louisiana, rather than a disorderly system that changes from one parish to another.
“I have been in the business of state and local tax policy for more than 20 years,” says Decuir, the former executive counsel for the Louisiana Department of Revenue. “This is by far the greatest movement I’ve witnessed on centralizing our state’s sales tax system. It was refreshing to see state and local stakeholders unite with the business community to ultimately make a unanimous recommendation to move Louisiana in the right direction.”
As far as what comes next, it’s expected that local tax collectors will file legislation to create the operational structure of the new system that would be outlined in the state constitution.
“It should also be noted that the local stakeholders presented a PowerPoint presentation, endorsed by each of their associations, related to a statutory proposal for specific items that they would like to see included in the new collection system, if the agreed upon constitutional amendment were to become law,” Decuir wrote in his report to legislators. “The primary disagreement was between the local collectors and the LDR over the control and makeup of the new board. The LDR responded to the local proposal with a letter proposing an alternative makeup of the new board. Therefore, the local proposal did not gain the support of the full CSUTA. At the conclusion of the CSUTA, local governments and LDR agreed to continue their discussions and work toward seeking common ground regarding the makeup and control of the new board prior to the start of the 2021 Legislative Session.”
The CSUTA study group met seven times over a four-month period, but was knocked slightly off course by last year’s hurricane season. Several key players were at the table, including the Police Jury Association of Louisiana, the Louisiana Municipal Association, the Louisiana School Boards Association, the Louisiana Sheriffs’ Association and the Louisiana Department of Revenue.
“Louisiana is one of only two states in America that uses this outdated form of sales tax collection, making it harder for business to operate in this state,” says Schexnayder in a prepared statement. “This is exactly why I formed the commission and why I will be authoring a constitutional amendment to create a centralized sales tax collection system in Louisiana to streamline the process and help create more jobs, just like we did with our lawsuit reforms last year to lower auto insurance rates.”
Bishop adds that centralizing sales tax collections in Louisiana will invite more businesses here. “I applaud Speaker Schexnayder’s initiative,” Bishop says, “and I join him in saying it’s a top priority for the upcoming session.”