People hear laissez les bons temps rouler and automatically think of Louisiana. However, for businesses operating in Louisiana having to adhere to sales tax filings in 64 taxing jurisdictions,1 decipher between conflicting sales tax interpretations from parish to parish, and navigate a revolving door of audits coming from all sides, there has not been a lot of good times to roll with.
While the concept of centralized sales tax administration has been discussed in and around the Louisiana Capitol for decades, the state has yet to see any legislation proposing such reform make meaningful progress with the Legislature. However, HB 199, filed by Speaker of the House Clay Schexnayder, has a notably different feel to it and could be a game changer for businesses operating in Louisiana.
The bill proposes a constitutional amendment to create a centralized method for administering local taxes. If approved by a two-thirds vote of each chamber of the Legislature, the amendment would go to the voters in a statewide election to be held November 8, 2022.
HB 199 comes as a result of the Centralized Sales Tax Commission formed by HR 31, in which representatives from local government, state government, and businesses held numerous meetings to hear testimony from all stakeholders and examine what a centralized system would look like. This was the first time all interested parties had a seat at the table to discuss centralization.
While HB 199 may be amended during the legislative process, below are highlights of the bill:
- Creates a new statewide political subdivision, currently referred to as the State and Local Streamlined Sales and Use Tax Commission (“Commission”).
- Upon its creation, the Louisiana Sales and Use Tax Commission for Remote Sellers and the Louisiana Uniform Local Sales Tax Board will be abolished, and their responsibilities transferred to the Commission.
- The Commission will have an eight-member board, with members appointment by:
- Louisiana School Boards Association
- Louisiana Municipal Association
- Police Jury Association of Louisiana
- Louisiana Sheriffs’ Association
- Louisiana Department of Revenue
- Louisiana Governor
- Speaker of the House of Representatives
- President of the Senate
- The Commission will have authority to issue policy advice and promulgate rules for state and local sales and use taxes.
- The Commission will audit taxpayers not physically located in Louisiana (remote sellers).
- The Commission will develop rules to streamline the audit process for Louisiana dealers.
The 2021 Regular Legislative Session convenes at 12:00 p.m. Central Daylight Time on April 12, 2021. Ryan will track HB 199 and other bills of importance to our clients and provide tax developments as needed. If you have any questions regarding HB 199 or any other Louisiana bill filings, please contact your Ryan tax professional or the contacts below.
1 State sales tax, plus 63 parishes that levy sales tax.
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