Tax court system floated

Jindal aims to simplify La. process

The Jindal administration confirmed Tuesday that it is having “ongoing discussions” about creating a tax court system in Louisiana to handle sales tax and other disputes.

“At the end of the day, everyone agrees that we have to simplify the process. The devil’s in the details,” said Jason Decuir, assistant secretary for legal affairs at the state Department of Revenue.

The proposal would be part of Gov. Bobby Jindal’s bid to eliminate state personal income and corporate taxes.

Because the governor wants to make the elimination revenue neutral, nearly $3 billion will have to be replaced, putting an emphasis on other tax collections.

B usinesses with a dispute concerning local sales tax remittance must go to a state district court. Disputes involving state sales taxes go before the Louisiana Board of Tax Appeals or, in the alternative, to state court if payment is made in full under protest.

Decuir said the sales tax structure in Louisiana is among the worst in the nation because of the complexity. He said it is hard to determine exemptions and rates.

The objective of a tax court system, Decuir said, would be simplification.

In addition to handling sales tax disputes, the new court system could resolve problems involving excise, cigarette and oil and gas taxes, Decuir said.

State House Committee on Ways and Means Chairman Joel Robideaux, R-Lafayette, said the Jindal administration briefed him on the idea Monday.

Robideaux, who is a certified public accountant, said the administration wants to make Louisiana more attractive to businesses.

“It would simplify the process,” Robideaux said. “It’s certainly something to look at.”

The wrinkles would be if the court system fails to be a money saver and if local governments oppose the idea, Robideaux said.

State Senate President John Alario, R-Westwego, said an independent tax court system is a good idea because people would know their taxes are being handled fairly.

Alario is a tax consultant.

“Taxes are so complex you need somebody that has a pretty good handle on it,” Alario said.

Details are sketchy right now as the administration talks to local governments and the courts about the idea. The proposal will have to become concrete for the legislative session that starts April 8.

There is a growing trend to creating independent tax courts. Businesses want to shorten what is often a lengthy legal battle. States want to embrace a business-friendly attitude and encourage resolution.

At least 18 states have tax courts.

Illinois will have a tax court by July 1 to accelerate the outcome of tax disputes involving large companies.

Georgia’s new tax court launched in January, driven by a state legislator who also is a restaurant owner.

In Louisiana, Ascension Parish Assessor Mert Smiley pursued the idea of a special court to handle state and local tax disputes in 2011 when he was a legislator.

Smiley said he wanted to accelerate legal proceedings and discourage individuals and businesses from waiting for an amnesty period to pay their taxes.

The proposal stalled in the first phase of the legislative process, never moving beyond the Louisiana House tax committee.

“It wasn’t very feasible at the time. It didn’t get very far because the Legislature didn’t want it at the time,” Smiley said Tuesday.

He said the main concern was money. Fellow legislators were uncertain how the state would pay to set up a new court system, he said.

“I still feel that the court is the right thing to do. (I) felt that at the time, but I had so much opposition because of the money,” Smiley said.

Decuir said a tax court system could save the state money although he is uncertain how much.

Meanwhile, the state Department of Revenue and the state Department of Economic Development plan to create a transferable tax credit registry.

In general, transferable tax credits benefit businesses such as the movie industry, which may not do enough business in a state to create the need to offset taxes. Instead, businesses sell the credits to those who do need to lower their tax bills.

The Jindal administration said the registry’s duties will include finalizing transfers of credits that cease with the governor’s tax package.