One Collector or Many?

Mar 20, 2017

The Sales Tax Streamlining Commission is nearly ready to release their recommendations on which sales tax exclusions and exemptions should stay and which should go away, but they seem to have reached an impasse on another aspect of streamlining.

“If we do truly want to be a streamlined state, we have to go to a centralized sales tax collection,” Dawn Starns with the National Federation of Independent Business insists. “Small business owners across the state support this.”

But there were some objections to the idea, primarily from local government representatives on the panel.

“What I don’t really understand is why local governments don’t want centralized sales tax collection in this state,” Starns said. “That’s not a rhetorical question. Why not just change it?”

Dan Garrett with the Louisiana Police Jury Association responded.

“It’s because we rely so much on those sales taxes,” Garrett explained. “And locals’ experience is that their local collectors do a more effective and efficient job of collecting those taxes. Understand – these are taxes that are voted on by the people in the city or the parish or the school system.”

Garret had more to say: “To ask local governments to simply trust that the money will flow through the state and flow back down to them, I think is unreasonable.”

“Local taxes, locally levied. And we’d like to keep it that way. That’s the reason.”

When Dan Patterson with  the Louisiana Association of Business and Industry made a motion to recommend centralized collections anyway, Garrett proposed an alternative.

“Why not have the local collectors perform functions for the state, to collect more taxes already due, and at a lower cost?”

In other words, having the locals collect all sales taxes, forwarding the state’s share to Baton Rouge. That idea got no traction.

And while the vote on recommending centralizing sales tax collections was 9-6 in favor, it wasn’t enough. That’s because the bill creating this particular commission requires a three-fourths approval by members – but only on this particular issue.

The Sales Tax Streamlining Commission meets again next week, to finalize their recommendations before the legislative session begins April 10.

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