Who gets your sales tax?

By Juanice Gray, jgray@natchitochestimes.com

Taxes.

Ugly little word for an undeniable necessity as a method for governing bodies to consistently receive revenue.

Sales taxes are imposed not only by state governments but also by city, county, tribal and special district governments. In many cases these local sales taxes can have a profound impact on the total rate consumers pay. We all hate them, hate to pay them and take them into consideration when making purchases, especially large purchases like automobiles. Where you live could mean a difference in pennies, or several hundred dollars, depending on the item purchased. Sales taxes are levied on every purchase of tangible goods. One thing to note is sales taxes are collected locally by the Natchitoches Tax Commission. Jerry McWherter is administrator.

The state is conducting a study to possibly create a statewide system. To do so would require a constitutional amendment and voter approval.

Anywhere in the parish of Natchitoches, each purchase has taxes for the school board, 2.5%; parish, 1%; sheriff’s office, .5%; and state, 4.45%; for a total of 8.45% added to the total bill. They’re right there on every receipt, but do you ever wonder why paper towels purchased in Natchitoches and those purchased in Robeline or Campti at the same price point all have a different total?

The four tax rates mentioned above are on every purchase outside Natchitoches city limits, but each municipality has their own tax rate added to the base 8.45% mentioned above. For example, take an item that costs $100. Add the state, school board, parish and sheriff’s office taxes combined total of 8.45% and that item now costs $108.45. The City of Natchitoches is the only municipality in the parish exempted from the 1% parish tax making their rate 9.95%.

That same item in the City of Natchitoches would be $109.95 because the 2.5% city tax is added to the base.

The Town of Campti also has a combined tax rate of 5.5%, but is obligated to pay the 1% parish tax making their rate 9.95%. Campti is at their legal maximum rate.

Robeline, Natchez and Clarence all have a tax rate of 1% so that item would be $109.95 if purchased in those locations.

Tax experts generally recommend that sales taxes apply to all final retail sales of goods and services but not intermediate business-to-business transactions in the production chain. These recommendations result in a tax system that applies tax once and only once to each product the market produces. It is not levied at each stop along the way.

A report by AARP states Louisiana, which has a combined average state and local sales tax of 9.52 percent, has the second-highest rate in the country, followed by Arkansas (9.47 percent), Alabama (9.22 percent) and Washington (9.21 percent). Tennessee came in first with 9.53 percent. This is according to newly released 2020 data from the Tax Foundation, an independent tax policy think tank.

“The release from the Tax Foundation indicating Louisiana has the second-highest sale tax rate on average of 9.52% is a concern to our senior citizens as well as those that are retired in Natchitoches Parish and living on fixed incomes. The actual sales tax rates in the Parish can vary from 8.45% to 10.45% depending on where you live or do your shopping,” McWherter said.

The Tax Foundation averages local taxes and weights them by the number of people who pay them. Most states exempt food from sales tax, although many of those exclude soda and candy from the exemption. Louisiana, however, taxes bottled water but not soda or candy. Groceries bought under the Supplemental Nutrition Assistance Program (SNAP) aren’t subject to state sales tax either. All states except Illinois exempt prescription drugs from sales tax.

“The exemption on groceries and prescriptions is a local option exemption. The local taxing jurisdictions have not exempted these categories,” McWherter said.