Lafayette would be alone in ending it
LAFAYETTE — Every other parish in the state offers businesses a tax rebate that the Lafayette City-Parish Council is considering doing away with, according to an analysis released Monday by the Greater Lafayette Chamber of Commerce.
The council is scheduled to vote Dec. 17 on a proposal to end a rebate on general sales tax; the rebate helps businesses cover the administrative expense of collecting and accounting for the tax.
Supporters of the proposal have pointed to the Lafayette Parish cities of Youngsville, Carencro and Scott, all of which have nixed so-called vendor’s compensation in recent years.
But outside of Lafayette Parish, every other city and parish in Louisiana still offers vendor’s compensation on general sales tax collections, according to information from the Chamber based on a review of data from the state Department of Revenue.
“I didn’t realize we were the only place in the state that was not doing it,” said Chamber President and CEO Jason El Koubi. “I think it was kind of a surprise to a lot of folks.”
El Koubi also said that every other state in the Deep South offers vendor’s compensation rebates on state sales tax collections.
“If the Council moves forward with this proposal, they would put Lafayette in a very unorthodox posture that places our retail businesses at a competitive disadvantage relative to every other parish in our state,” El Koubi said.
The tax rebate in Lafayette has been in place since the 1960s.
It allows businesses to keep 2 percent of the total collections for city-parish sales taxes.
The business community has been vocal in a push to keep the rebate in place.
Supporters of the repeal on the council say the city-parish government needs the revenue and that businesses should not be compensated for meeting the legal requirement of collecting sales tax.
City-Parish Councilman Jay Castille, who wants to end the rebate, said he is not swayed by tax policies in other parishes.
“I’m not comparing us to anybody,” he said. “If they choose to do it, that’s them.”
Castille also cited changes by the Legislature this year that reduce the vendor’s compensation allowed by the state for state sales tax collections.
He said that, following that move, he expects local governments in other areas soon will be giving more scrutiny to how much revenue is at play with vendor’s compensation.
Ending the rebate would bring about $1.5 million in new revenue each year to city-parish coffers, according to figures from city-parish government.
The effect on businesses would vary widely, depending on sales.
For a business in the city of Lafayette with $1 million in annual taxable sales, the annual rebate would be $400.
Prior proposals to end city-parish government’s vendor’s compensation have failed.