Four state amendments await voters Nov. 13

Published 11:54 am Wednesday, September 22, 2021

Voters will decide on four amendments Saturday, Nov. 13. The first two are considered major tax reform, or at the least what is hoped will pave the way for major tax reform for Louisiana.

The Chamber of Southwest Louisiana is supporting all four amendments, according to George Swift, president/CEO, The Southwest Louisiana Economic Development Alliance.

Swift spoke to the American Press about Louisiana Amendment No. 1 and its impact on business and business development. A “yes” vote on this amendment supports creating the State and Local Streamlined Sales and Use Tax Commission to provide streamlined electronic filing and remittance of all sales and use taxes.

“By almost any measure, Louisiana’s sales tax structure is a mess,” Swift said. “Constitutional Amendment No. 1 takes a much more comprehensive approach than anything attempted thus far. It does not address many of the state’s thorny sales tax problems. For instance, rates will stay the same and the lack of uniformity within local jurisdictions and with the state will remain.”

A prime example: Lake Charles has two different sales tax rates, depending on whether the tax is charged inside or outside of Ward 1. The average combined sales tax is 10.2 percent for Calcasieu Parish municipalities, higher than 80 percent of other parishes.

In DeRidder, the state and local combined sales tax is 9.2 percent. In Oakdale, it’s 10.45 percent. When a business owner has businesses in all three of these Southwest Louisiana municipalities, his or her sales tax has to go different places and reflect these different rates.

Swift thinks the approval of this amendment, if successful, could begin a process that, if successful, can make it much easier for local businesses to comply with sales tax collections and remove Louisiana from a legal cloud that could be extremely disruptive to the collection of local sales taxes.

Ajay Patel owns McDonald franchises in Louisiana with his sons, Niel and Ricky. He’s also on the Louisiana Association of Business Board. He agrees. Streamlining collection would make it much simpler for his business.

“I have 25 businesses and I have to write 25 different checks,” he said. Passing this amendment would mean that I pay tax to one entity. It’s easier and most states are already doing this,” he said. “It makes sense. It’s the right thing to do.”

Eric Tarver, Lake Charles Toyota, said automobile sales tax has been streamlined and collected a single entity, the Department of Motor Vehicles for some time.

“I know legislators are putting a lot of work into tax reform, and I support what they’re doing,” Tarver added. “Generally I do not support any measures that make government bigger or turns jobs over to the state but in this case the idea is to streamline, make it simpler on business.”

“It could also help improve our rankings as a state with a more business-friendly tax structure,” Swift said. “Finally, it should be noted that after many years of resistance, local governments have worked in good faith with business groups and others that could help solve a problem that everyone knows needs to be addressed, while ensuring local governments have the revenues they need in a timely fashion to protect vital services they provide.”

Jerry Milner is finance director for the city of Westlake. He is not in favor of the amendment. Moving to a consolidated system takes control from local governments to collect their sales taxes.

“The closer you are to the people who collect and remit these taxes, the better,” he said. “No one knows local business behavior better than local authorities and I think locals do a pretty good job of taking care of their business. I can pick up the phone and call, talk if I have a question about my sales tax. They do a good job, including the audits they conduct. Taxes are collected at Westlake and remitted to Westlake. I think this should stay at a local level.”

The purpose of the amendment is to provide a streamlined, centralized mechanism for businesses to electronically remit all the sales taxes they collect to a single entity, which is then charged with promptly distributing those payments to the governing authorities that levy the taxes. The goal is to spare local businesses from the problem many face in dealing with so many tax collectors across the state. The Chamber SWLA believes Amendment No. 1 represents a big and important step forward and one Louisiana should not delay in taking.

Public Affairs Research Council offers an independent non-partisan review of all four amendments that can be found online. It outlines what will not change with a “yes” vote for the Amendment No. 1: audits, tax rates and exemptions. However, the new streamlining structure could facilitate greater uniformity and policy consensus.

Louisiana has the second highest combined state and local tax rates at an average of 9.52 percent behind Tennessee at 9.55, and followed by Arkansas at 9.51, Washington at 9.23 and Alabama at 9.22.