Councilmen say idea may be revived
LAFAYETTE — A City-Parish Council proposal to nix a rebate that helps businesses cover the administrative expenses of collecting and accounting for sales tax appears dead for now.
The four councilmen who proposed repealing the tax rebate announced Thursday they withdrew the measure, which had been scheduled to come up for a vote Tuesday.
The sponsors — Kevin Naquin, Jay Castille, Don Bertrand and Keith Patin — did not rule out revisiting the issue, writing in a joint statement that “Discussion on this matter will continue in the near future.”
The rebate, which has been in place since the 1960s, allows businesses to keep 2 percent of the total collections for city-parish sales taxes.
Several business leaders spoke out against the repeal of what’s known as vendor’s compensation, and the Greater Lafayette Chamber of Commerce released an analysis this week that found all cities and parishes outside of Lafayette Parish still offer a similar rebate on general sales tax collections.
The only cities in the state that have done away with the rebate are Youngsville, Carencro and Scott, according to the Chamber’s analysis, which was based on a review of data from the state Department of Revenue.
“I think the authors made the right decision to take a step back and have a broader conversation about how to solve important issues. We look forward to working with the council and others to develop solutions for our community,” Chamber President and CEO Jason El Koubi said in a written statement.
“Given that virtually every local tax jurisdiction in Louisiana provides vendor’s compensation for collecting general local sales taxes, moving forward with this proposal would have put Lafayette in a very unorthodox posture that would have placed our retail businesses at a competitive disadvantage.”
Naquin, who has been one of the more vocal proponents of the repeal, said earlier this week that he believes city-parish government should receive the full amount of sales tax that voters approved, without businesses taking a share.
“Lafayette voted on a sales tax, and we are not even collecting what the voters approved,” he said. “I just don’t think it’s right that voters didn’t have a say on it.”
Ending the rebate would bring about $1.5 million a year in new revenue to city-parish government, according to figures from city-parish government.
It’s money that supporters of the repeal have said is needed to meet growing budget needs, particularly for the Police and Fire departments.
Ending the repeal would have had varying impacts on businesses, from a few dollars on the low end to a few thousand dollars on the high, depending on sales.
For a business in the city of Lafayette with $1 million in annual taxable sales, the annual rebate is $400.
The council had voted 6-3 earlier this month to introduce the repeal, a procedural hurdle that must be cleared before a final vote on city-parish ordinances.
Six votes would have been enough to pass the repeal, but two council members — Brandon Shelvin and Kenneth Boudreaux — indicated when they voted on the introduction that they were on the fence about the proposal.
Boudreaux said Thursday he still has not made up his mind and wouldn’t rule out supporting the measure in the future.
“I was still kind of split on it. I thought there were good arguments on both sides,” Boudreaux said. “By pulling it, it doesn’t say it’s necessarily over or it goes away. It just gives us some time.”