Last week, I gave you a quick and easy look into all the amendments you will see on the ballot. This week, you will get a more detailed look at the issues. In general, the first two amendments are tax reform measures. The fist amendment attempts to change how sales taxes are collected across the state. Make no mistake, Louisiana is an outlier here. Nearly every other state (that collects sales taxes) collects sales taxes at the state level and disburses them back to local cities and towns. But in Louisiana local cities and towns collect sales taxes, keep their portions and send the state its’ share. Let’s take a closer look at Amendment One.
In Louisiana, the Department of Revenue receives a 4.45% tax on all sales transactions. These sales occur in retail and wholesale business transactions. Currently every town, city or parish collects the retail and wholesale taxes that occur within their jurisdictions. A special state commission collects all internet sales taxes for each municipality and the state. The current system is convoluted.
Related: Breaking down all the amendments
Amendment 1 “Do you support an amendment to authorizeAmendment one on the ballot
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?”
Amendment one is designed to simplify this. It creates a new eight-member central collection agency. The new tax commission will collect all sales taxes and send them to the state and appropriate municipality. The new State and Local Streamlined Sales and Use Tax Commission will be appointed by:
- The Governor
- the Secretary of the Department of Revenue
- the Louisiana School Boards Association
- the Louisiana Municipal Association
- the Police Jury Association of Louisiana
- the Louisiana Sheriffs’ Association
- the Speaker of the House of Representatives, and
- the President of the Senate.
The new commission also makes online payments available to businesses. Currently some parishes provide an online service, but the commission creates a statewide E-filing system. Also, the commission will offer policy advice and create statewide tax audit policy.
Currently, the Louisiana constitution requires municipalities to collect their share of these taxes. Most municipalities base their budgets on the collection of these taxes. And wrestling control from these cities and parishes will be difficult. Mayor LaToya Cantrell has already come out against passage of this amendment. Recently, on WBOK 1230 am radio, she said, “Passing this amendment would be bad for the city! We need those resources and put them to use immediately.” Probably every other elected leader takes the same position. Change is hard. Shifting how local governments get their pocket change is even harder. Interesting stuff in our closer look at Amendment One.
Reasons to Vote Yes
There are two basic reasons to change the current tax collection system – business and legal. If you are a big box retailer doing business in Louisiana, you have to write hundreds of checks to disburse taxes collected in your business. A retailer in metro NOLA has to pay Orleans, Jefferson St. Bernard, St Tammany etc. every month. This creates a business expense just to do business in the state. Writing one check to the new commission makes the state more business friendly. Legally, federal law requires fair and open commerce. The current system likely fails to meet this standard.
Reasons to Vote No
Reasons to keep the current system are numerous. Local governments can more easily collect from local businesses. They have a closer relationship. And even though the new system is statewide, taxes are still different for each municipality. And the new layer of bureaucracy might lead to late payments to cities whose services could be disrupted by lack of operating funds.
It’s up to you to decide the best option going forward.