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Our opinion: State sales-tax system demands reform

July 12, 2018
Originally Posted on Houma Today

Like so many other aspects of Louisiana’s state government, our method of collecting sales taxes is antiquated and wasteful.

Rather than have one state agency that collects and distributes sales taxes, Louisiana leaves that duty up to each individual parish.

That might sound like it keeps the task closer to the local agencies that will use some of the money that’s collected. But instead, the practice creates a needless duplication of effort and an indefensible waste of resources.

It should tell us something that Louisiana is the only state in the nation that gives such broad latitude to its localities in collecting sales taxes.

Stephen Waguespack, president of the Louisiana Association of Business and Industry, put the problem into perspective in a recent guest column: “For instance, imagine if you operate a small business in Louisiana that has customers in every parish. You could end up remitting sales taxes on 64 different forms -- with 64 different exemption definitions and rate calculations -- and be subject to 64 different audits.”

That’s not a business-friendly way for the state to conduct its affairs. But there may be hope.

Waguespack said there is a chance that a recent Supreme Court decision over Internet sales tax collections could lead to increased calls for much-needed reforms to the larger tax system.

That would be a marked improvement over the current situation, which is rife with difficulties and confusion and amounts to a powerful reason companies might prefer to do business in other states.

Unfortunately, some local governments have already registered their opposition to a centralized, simplified, streamlined approach to tax collect. Why do something just once if 64 different government agencies can do it over and over again?

The answer is simple: Rather than being a make-work program for government bureaucrats, our sales tax collection should make it simple for businesses to know how to collect it and how to remit payments. And, it should result in a fair, consistent method of applying the tax laws – something that is clearly impossible when dozens of different local governments have such control of the process.

Instead of allowing our tax system to embrace the changes it so badly needs, Louisiana is implementing a dual system that will allow out-of-state retailers to pay into one centralized system, but in-state retailers will remain under the control of our network of confusion.

That’s neither fair nor productive. Louisiana can and should simplify and improve its tax system – and not just for companies that operate elsewhere.

Editorials represent the opinion of the newspaper, not of any individual.