Should Louisiana simplify sales tax collections?

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Sen. Louie Bernard welcomed a large crowd of stakeholders and the public to an informational meeting Tuesday at the City Council Chambers. Tax commission members, fiscal specialists, finance directors, business owners and others attended to learn more about the Constitutional Amendment on the Oct. 9 ballot proposing statewide sales tax collections. Photo by Juanice Gray

ON THE OCT. 9 BALLOT

“Do you support an amendment to authorize the legislature to provide for the streamlined electronic filing, electronic remittance, and the collection of sales and use taxes levied within the state by the State and Local Streamlined Sales and Use Tax Commission and to provide for the funding, duties, and responsibilities of the commission? (Adds Article VII, Section 3.1)” 

D&D Construction

Juanice Gray | Editor
There are agencies throughout each parish and municipality that collect tax revenue in Louisiana including sheriffs, police juries, school boards, and other government entities. Also, the Tax Commission for Remote Sellers collects taxes from out-of-state sellers to Louisiana buyers.
If a company does business in more than one parish, it has to register in each parish, and pay taxes and be audited in each parish.
For example, The Coffee Machine (fictitious) has locations in seven parishes; Natchitoches, Red River, Bienville, Caddo, Winn, Sabine and DeSoto. It has to remit taxes to each of the seven parishes.

This article published in the Aug. 28, 2021, print edition

On the Oct. 9 ballot is a constitutional amendment to create the State and Local Streamlined Sales and Use Tax Commission. The commission would absorb the duties of, and replace, the Louisiana Sales and Use Tax Commission for Remote Sellers and the Louisiana Uniform Local Sales Tax Board after one year with all employees transferred to the new commission.

“If an out of state company
is doing a certain
amount of transactions…
and so much in
terms of dollars… they
create an economic
nexus in that parish or
the state… such that
the law will allow you
to go and collect from
out of state retailers
without them having a
physical presence in
the state or parish,
however, the Supreme
Court said that the out
of state seller has to be
able to comply with a
simplified tax system.”
Jason DeCuir, head of the
Tax Reform Committee

Should the amendment pass, The Coffee Machine would then only have to remit one check to the Streamlined Commission. Those funds would then be sent out to the local tax commissions for disbursement to the many governmental entities.
Louisiana is one of only two states that does not utilize centralized taxes.
Sen. Louie Bernard – R, Dist. 31, Rep. Rodney Schamerhorn – R, Dist. 24; Rep. Gabe Firment – R, Dist. 22; and Speaker of the House Clay Schexnayder -R, Dist. 81 along with Jason DeCuir, head of the Reform Committee, met with business owners, tax and finance professionals, representatives from Sabine, Red River and Natchitoches Parish governments and schools boards and others at an informational meeting Tuesday, Aug. 24.
Bernard opened the meeting stating, “I decided, personally, this is something Louisiana has to do. I think it is a game changer for us. There is too much money on the table from online vendors that we aren’t collecting.”

From left are Sen. Louie Bernard – R, Dist. 31; Rep. Rodney
Schamerhorn – R, Dist. 24; Rep. Gabe Firment – R, Dist. 22; and Speaker
of the House Clay Schexnayder -R, Dist. 81; fielding questions from
audience members during the informational meeting on the centralized
sales tax Constitutional Amendment on the Oct. 9 ballot.

Among the arguments for passing the bill were the economic impact on the state. As Bernard stated, taxes from online vendors are not being collected and disbursed properly. In addition, brick and mortar companies consider the ease of remitting taxes when researching locations. “It’s just not convenient for them,” Bernard said. “Then they go look somewhere else.”
Schexnayder cited one company that has operations in Louisiana as well as out of state. “They have 12 locations out of state and their taxes are done in an hour for all 12. For their 16 locations in Louisiana, it takes at least all day.”
What do people really want to know? How the local, mom and pop business and corporations will be affected.
Natchitoches Tax Commission Director Jerry McWherter said distribution of the taxes to the school board, parish government, fire, etc. will be done through their office.
Should businesses wish to opt out of the online portal for submissions, they may continue to file the “old way” either in person or by sending to the local commission without penalty.
“We’re not going to turn away their money,” said DeCuir.
Schexnayder said the portal would allow better tracking of online sales enabling a more efficient system of collections.

Speaker of the House Clay Schexnayder

He emphasized it would only change the way sales taxes are submitted and would have no impact on the amounts, which are set by the local governments and voters. It also would not affect how businesses are opened or licensed.
“It would just make the state better and more attractive to industry,” he said “Those dollars will come back to you just like remote sellers.”
Sales from remote sellers like Wayfair, Amazon and others could account for up to $400 million in lost tax revenue using the current system according the Schexnayder. “It’s a moving target. We don’t really know exactly how much we’re missing until we look at what other states,” he said. “Our tax climate is hindering our growth.”
Should the measure pass in October, it would take roughly 18 months to transition to the new system during which time the tax remittal process would remain status quo.

From left are Shamerhorn, Firment, Schexnayder and Bernard

For more information on the amendment, visit www.TaxFoundation.org/louisiana-tax-plan-details
or contact any of the following local legislators for details:
Louie Bernard, 431 Jefferson Street Natchitoches, LA 71457
318.357.3116, sen31@legis.la.gov
Rodney Schamerhorn, POB 83, Hornbeck, LA 71439, 318.565.4959, hse024@legis.la.gov
Gabe Firment, POB 640, Pollock, LA 71467, 318.765.9606, hse022@legis.la.gov
Clay Schexnayder, 6473 Hwy 44, Suite 205, Gonzales, LA 70737, 225.473.6016, schexnayderc@legis.la.gov

STREAMLINED SALES TAX COMMISSION MEMBERS

would consist of people representing:

•La. Sheriff’s Assn.

•La. School Board Assn.

•La. Police Jury Assn.

•Local Municipal Assn.

•Louisiana Governor

•La. Dept. of Revenue

•State Senate President

•Speaker of the House

Representatives