A Baton Rouge district court ruled that a funding system for the state’s tax board is unconstitutional, as the statute is allegedly using taxes for purposes upon which the voters have not decided.
According to Watchdog, the situation began in 2017 when the Louisiana Uniform Local Sales Tax Board was created by the legislative session in order to streamline the collection and use of “local sales and use taxes,” and the board was funded by taking a portion of sales tax on motor vehicles. Dannie Garrett, the attorney representing the plaintiffs — the Plaquemines Parish Council and the St. James Parish School Board — explained that Judge Wilson Fields' ruling found that the legislation is indeed unconstitutional and the state cannot simply take local sales tax to fund a board.
“The primary concern with the legislation is that the way the board’s operations were proposed to be funded is that the statute provides that two-tenths of a percent to a third of a percent of the local sales taxes collected on the sale of motor vehicles would be withheld and would then be given to the board for its operations,” Garrett told Louisiana Record.
Garrett explained that other government entities are responsible for collecting and redistributing sales taxes, such as the Plaquemines Parish Council and the St. James Parish School Board, which serve as the tax collectors in their parishes.
“This statute said that the Office of Motor Vehicles, which collected sales taxes from car sales, should collect an extra percentage from the sales and give it to the board that the legislature had created,” Garrett said. “Though the sales tax taken is only a small percentage, it actually amounts to about $900,000 to $1 million a year.”
While this may not be a large amount on a government scale, this arrangement does not exist anywhere in Louisiana law, Garrett said.
“The plaintiffs that decided to go forward with the complaint did so because it was a bad precedent, because the legislature could easily say ‘we have another project we need money for, let’s just take another piece of their sales tax,’” Garrett said. “Ultimately, Judge Fields of the 19th Judicial District ruled that the small piece of the law regarding mandatory funding was unconstitutional.”