School Board has  discretion on claims

A recent attorney general’s opinion appears to give the East Feliciana Parish School Board some discretion in deciding whether to pursue unpaid sales tax claims for repair work done by parish businesses between 2010 and 2012.

State law allows East Feliciana Parish to exempt local sales taxes on repair work done locally for equipment owned by out-of-state companies.

The School Board and Police Jury adopted a three-year exemption in the summer of 2007, but the exemption expired in 2010. No one noticed the lapse until last year, however.

The state does not levy its sales taxes on the equipment repairs, and six East Feliciana Parish firms persuaded the jury and School Board to reinstate the exemption in July.

The question of whether the firms should collect taxes from their customers for work done during the two-year window was not resolved.

A Jan. 24 opinion authored by Assistant Attorney General Benjamin A. Huxen II said the disputed taxes are “legally and validly owed to the School Board” and the board would be violating the state constitution if it failed or declined to pursue claims for the money.

“However, the School Board has the authority to review each disputed tax and make an independent determination as to whether the benefit or value of recovery” would be equal or more than the cost of pursuing the claims, the opinion adds.

The board voted 7-5 in July to reinstate the exemption, with representatives of six parish firms saying their out-of-state competitors do not collect sales tax on repairs, and imposing the tax would put them at a competitive disadvantage.

Their clients also refuse to pay the taxes, the companies’ representatives told the board.