La. Revenue and Taxation § 47:301.2

Current with changes from the 2024 Legislative Session

Section 47:301.2 - Sales Tax Streamlining and Modernization Commission

A. Purpose. The legislature hereby recognizes that:

(1) The sales and use taxes on tangible personal property, services, rentals, and leases hereinafter referred to as "sales tax", represent one of Louisiana's two major revenue sources, representing an average of forty percent of state general fund receipts.

(2) The sales tax is the main source of revenue for most of Louisiana's local governments.

(3) There exist significant structural issues impacting the state and local sales taxes, which include legislative actions that adversely impact the tax base, a distinct shift away from a goods-based to a services-based economy, and an increasing shift from "brick and mortar" retail transactions to e-commerce purchases.

(4) The combined average sales tax rate of 8.9% for Louisiana was the third highest in the nation as reported by the Tax Foundation in 2014.

(5) The legislature further recognizes that it is good public policy to contemplate modernization of the sales tax structure to reflect the twenty-first century economy as a way to aid in stabilizing the sales tax as a revenue source for the state and its local governments.

B. Sales Tax Streamlining and Modernization Commission. For these reasons, the Sales Tax Streamlining and Modernization Commission, hereinafter referred to as "commission", is hereby established to perform a comprehensive study of Louisiana's state and local sales tax systems, and to make recommendations to the legislature regarding revision of practices, administrative procedure, statutory law, and Louisiana Constitution, all for the purpose of streamlining and modernizing this vital revenue source for the state and its local governments. The recommendations shall encompass an overall goal of ensuring both revenue stability and taxpayer equity through the adoption of proven contemporary tax policies. The policies shall be based on the concept of a low tax rate with a broad base to be administered fairly and efficiently.

C. Members. The commission shall consist of the following twenty members, who shall serve without compensation except for their reasonable and necessary expenses related to the performance of their duties as members of the commission, and then only in such amounts as is provided by law for state employees and officials, or per diem or expense reimbursement to which they may be individually entitled as members of their constituent organizations:

(1) The speaker of the House of Representatives or his designee.

(2) The president of the Senate or his designee.

(3) The chairman of the House Committee on Ways and Means or his designee.

(4) The chairman of the Senate Committee on Revenue and Fiscal Affairs or his designee.

(5) A member appointed by the Police Jury Association of Louisiana.

(6) A member appointed by the Louisiana Municipal Association.

(7) A member appointed by the Louisiana School Boards Association.

(8) A member appointed by the Louisiana Association of Tax Administrators.

(9) A member appointed by the Louisiana Sheriffs Association.

(10) A member appointed by the Louisiana Multiparish Tax Commission.

(11) A member appointed by the Louisiana Association of Business and Industry.

(12) A member appointed by the Louisiana Retailers Association.

(13) A member appointed by the Louisiana Automobile Dealers Association.

(14) A member appointed by the National Federation of Independent Business.

(15) A member appointed by Louisiana Industrial Development Executives Association.

(16) A member appointed by Society of Louisiana Certified Public Accountants.

(17) A member appointed by the Public Affairs Research Council of Louisiana.

(18) A member appointed by The Tax Foundation.

(19) The secretary of the Department of Revenue or his designee.

(20) The Legislative Auditor, or his designee.

D. Meetings.

(1) The commission shall conduct monthly meetings and may consider testimony from witnesses and documents produced for purposes of the commission. The first meeting shall be held no later than July 31, 2015. A majority of the commission members shall constitute a quorum. Meetings of the commission shall be held at the state capitol and be open to the public, pursuant to the provisions of R.S. 42:12 et seq.

(2) The commission shall elect a chairman at its first meeting by a majority vote of a quorum of the members present and voting. The chairman shall prepare the schedules and agendas for meetings, and shall coordinate the staff support deemed necessary for the function of the commission. The following organizations shall assist the commission with staff support as may be required:

(a) Louisiana Department of Revenue.

(b) Staff of the House of Representatives, Senate, Legislative Fiscal Office, and Legislative Auditor's Office.

(3) The commission, by majority vote of members present and voting, may establish subcommittees and provide for guidelines and timetables for their reports to the commission.

E. Studies. The duty of the commission shall be to perform a comprehensive study of the following issues relating to Louisiana's state and local sales tax systems and to develop specific recommendations for legislative consideration relative thereto:

(1) A study of how Louisiana state and local sales tax policy affects the economy of our state, and how changes in such policy may better position Louisiana for the future in terms of equity and economic competitiveness.

(2) A study of the state and local government sales tax bases and rates and, to the degree practicable, how those compare with that of other states with similar demographics and economies. This shall include examination of the concept of broadening the tax base to allow for lower rates and a more equitable system. Given the global shift of economic activity from goods-based to services-based consumption, such study shall specifically include consideration of the taxation of services as a way to strengthen the base and also to help offset the otherwise regressive nature of a sales tax structure where few services are taxed. Further, this study shall include consideration of the impact of tax rates on the deleterious effects of the migration of economic consumption from land-based to the Internet, not only on state and local revenue stability, but also on the economic competitiveness and survival of Louisiana's retail businesses, which local businesses are critical to the vitality of the cultural and community life in this state.

(3) A study of all special tax treatment against sales tax, inclusive of credits, deductions, discounts, exclusions, exemptions, and rebates. This shall include, to the degree practicable, a comparison to that of other states with similar populations and economies.

(4) A study of state and local government sales tax collection and audit procedures and, to the degree practicable, a comparison to that of other states which are considered at a national level to have an efficient, contemporary administrative and procedural scheme.

F. There shall be a subcommittee established for the development of recommendations to be presented to the commission concerning potential policy changes regarding coordinated multi-parish sales and use tax audits. The subcommittee shall be composed of the commission members representing the Police Jury Association of Louisiana, the Louisiana Municipal Association, the Louisiana School Boards Association, the Louisiana Association of Tax Administrators, the Louisiana Sheriffs Association, the Louisiana Multi-parish Tax Commission, the Department of Revenue, and the Louisiana Legislative Auditor. The members of the subcommittee shall elect a chairman as approved by a majority of the members of the subcommittee. The subcommittee's report shall be presented to the commission by January 15, 2017.

G. Reports and Recommendations. The commission shall review any reports of the research groups and subcommittees, and after having conducted its comprehensive review, shall prepare a report of its recommendations for any revision of current practices, administrative procedure, statutory law, and Louisiana constitution. A recommendation concerning the collection or administration of local sales and use taxes shall require approval of three-quarters of the members of the commission. The commission's interim report shall be submitted to the governor, the president of the Senate, and the speaker of the House of Representatives no later than January 15, 2016. The final report shall be prepared as determined by the commission.

H. Sunset. The commission shall terminate on June 30, 2017, but if approved by a two-thirds vote of the membership prior to June 30, 2017, the commission may continue its work through June 30, 2018.

La. Revenue and Taxation § 47:301.2

Acts 2015, No. 405, §1, eff. July 1, 2015; Acts 2016, No. 564, §1.