Louisiana House Proposes a Centralized Sales & Use Tax Collection Board
In March, the Louisiana Speaker of the House introduced House Bill 199, which proposes a constitutional amendment that would allow the state to establish a centralized sales and use tax collection board.
House Bill 199 creates the State and Local Streamlined Sales and Use Tax Commission (Commission), which will be an eight-person group charged with centralizing the compliance process among the localities. The Commission will provide a streamlined filing and remittance system, audit remote sellers, and comprise a centralized method to audit taxpayers with physical presence. The Commission also will propose rules and regulations on state and local sales and use tax. This Commission will replace the Louisiana Sales and Use Tax Commission for Remote Sellers and the Louisiana Uniform Local Sales Tax Board.
If the bill receives a two-thirds majority vote from both the House and Senate, the proposed amendment will be on the ballot in November.
Louisiana is one of the few states that allow local governments to impose and collect their own sales and use taxes. The Commission would greatly simplify Louisiana’s compliance process. House Bill 199 stems from the seminal 2018 South Dakota v. Wayfair, Inc. case where the U.S. Supreme Court’s opinion pointed to South Dakota’s steps toward sales tax simplification as a reasonable basis for why the state’s economic nexus law would likely pass constitutional muster. In other words, Louisiana’s economic nexus law would be on better footing from a constitutional perspective if the state simplified its current system.
Taxpayers should carefully monitor the progress of House Bill 199. Although House Bill 199 could alleviate the sales tax compliance burden, taxpayers should be aware that several new regulations and procedures are likely to follow.
For additional guidance on House Bill 199, reach out to your BKD Trusted Advisor™ or submit the Contact Us form below.