Latest Wrinkle In Louisiana Tax Talks: Supreme Court Ruling
BATON ROUGE, La. (AP) — A U.S. Supreme Court ruling that paves the way for states to collect more sales taxes from online purchases has upended shaky tax negotiations among lawmakers in the Louisiana House.
Louisiana has laws aimed at being able to take in taxes from online shoppers and already collects some sales taxes from retailers like Amazon. Lawmakers hoped the high court decision Thursday could help the state broaden those collections and eventually mean more money for the state treasury.
But the Supreme Court decision simply added more confusion to already uncertain discussions.
It's unclear how long it could take for such sales tax collections to begin, or how much money the treasury could collect. Disagreement also emerged about whether Louisiana has several key provisions on the books to match the requirements involved in the Supreme Court ruling for online sales tax collection.
"It's not going to result in immediate income to the state," said Republican Rep. Jay Morris, a Monroe lawyer.
Still, the ruling was a central topic of discussion Thursday in the House, where lawmakers in a special session are haggling over sales tax measures aimed at lessening steep budget cuts that hit in July. One tax bill failed in an evening vote, while a second bill was pulled from consideration.
Republicans already reticent to support taxes circulated news of the ruling — and talked about the possible income it could generate — as a reason to vote for a lower-dollar sales tax proposal or to vote against taxes entirely.
Lafayette Republican Rep. Stuart Bishop pulled his sales tax proposal from consideration permanently, saying he couldn't reach the two-thirds vote for passage. He said the court ruling made reaching the vote count harder.
"That changed some minds today," Bishop said.
Later in the day, the House rejected a second sales tax bill, which fell 10 votes short of the 70 needed. Republican House Speaker Taylor Barras declared his chamber was at "an extreme deadlock," and he urged continued talks as the House left for the night.
"What we need is movement from the two corners," Barras said. "No one has budged in the last three days."
Lawmakers return Friday.
Morris noted the online sales tax case has to go back to a South Dakota court for more decisions before it could affect sales tax collections in any state, including Louisiana. Scott Drenkard, with the conservative, nonpartisan Tax Foundation, said Louisiana's laws don't dovetail with the court ruling.
"For Louisiana, this is something that lawmakers should be looking at in the long term, but this does not help you in this special session at all, sorry," Drenkard said.
Republican Rep. Nancy Landry, a lawyer from Lafayette, disagreed, telling her colleagues: "I think we're going to see revenue right away."
Revenue Secretary Kimberly Robinson said she will move ahead with efforts to start collecting the online sales tax, though she didn't have a timeline for enforcement and she acknowledged retailers could sue and "drag this out."
It's the third special session this year, called by Gov. John Bel Edwards in the hopes of renewing some expiring sales taxes to fill state coffers and avoid deep reductions across college campuses and state programs only days away. Two prior special sessions failed to broker a tax deal.
This special session, which must end June 27, centers on whether part of a 1 percent sales tax should be continued next month, when the state's sales tax rate is scheduled to drop from 5 percent to 4 percent. Competing proposals involving renewing 0.4 percent or 0.5 percent of the tax, the equivalent of 10 cents in sales tax charged for every $100 purchase.
Edwards and House Democrats want to renew half the 1 percent tax, a proposal previously backed by the Senate. House Republican leaders have fallen behind the 0.4 percent renewal rate. A bill containing the 0.5 percent rate failed in a 60-40 vote , with GOP leaders and most Republicans in the chamber opposed.
The 0.5 percent renewal rate would raise the $506 million needed to fully finance the upcoming budget. The 0.4 percent would raise more than $420 million.
– by Melinda Deslatte, AP reporter