LAFAYETTE — A proposal to end a rebate that helps businesses cover accounting expenses related to collecting sales tax is still up in the air after a more than hourlong debate at Tuesday’s Lafayette City-Parish Council meeting.
In other action Tuesday, the council moved forward a ordinance that would offer an amnesty period for drivers to pay past-due traffic camera fines without penalty.
The council last month delayed a vote on the sales tax issue, and there was no apparent consensus after a meeting Tuesday that attracted a small contingent of business owners who pushed to keep the rebate in place.
J.D. Morein, who owns an automotive services company, told council members that the rebate covers only a fraction of the cost of computer software and personnel needed to process sales tax payments.
“It’s very expensive for us to collect money for you,” he said. “… I see no reason to change what’s going on now. It’s worked for 50 years.”
The move to end the rebate has also attracted opposition from the Lafayette Auto Dealers Association, which represents nine local car dealerships.
Local law allows businesses to keep 2 percent of total collections for city-parish government sales taxes as long as the sales tax payment is on time.
City-Parish Councilman Jay Castille has proposed an ordinance to end the rebate, which has been in place since the 1960s.
Ending the rebate would bring an estimated $1.5 million a year of additional revenue into city-parish coffers, according to figures from city-parish government.
The impact on individual businesses would vary depending on sales volume.
For a retail business in the city of Lafayette with $1 million in annual taxable sales, the current rebate is $400 a year.
Castille argued that collecting sales tax should be considered a routine cost of doing business, not an expense covered by a rebate.
“When you open up your business, going in, you know what you are getting into,” he said. “These are taxpayer dollars that belong to the taxpayers.”
Castille and Kevin Naquin were the only two council members who took strong positions against the rebate.
“It’s plain and simple that this council and this government are trying to find revenue to fill holes,” he said, adding that the rebate is tax revenue “that we are giving away that could be used for public safety.”
Councilmen Andy Naquin and William Theriot took the other side of the debate, arguing that the tax rebate is vital to help businesses cover the expenses related to collecting taxes for the city-parish government.
“I don’t see any reason to pull this rebate away from these businesses,” Andy Naquin said.
City-Parish Attorney Mike Hebert told council members that the rebate might be considered a legally impermissible donation of public money to private businesses.
Louisiana law generally prohibits local government from giving money, services or other things of value to private individuals or businesses.
“At a minimum it raises a serious legal question as to whether this would pass muster under the state constitution,” Hebert said.
Scott, Carencro and the Lafayette Parish School Board have all ended similar sales tax rebates, but other parishes in the region still have rebates similar to Lafayette’s.
No vote has been scheduled on the tax rebate proposal.
In other business Tuesday, the council moved forward a ordinance that would offer an amnesty period for drivers to pay past-due traffic camera fines without penalty before the start of a stricter program to collect the unpaid citations.
A final vote on the amnesty program is set for March 19.
The city’s automated traffic camera enforcement program began in 2007. The cameras take pictures of the driver and license plate when a vehicle runs a red light or speeds through an intersection, and the alleged violator is mailed a citation.
The total amount of uncollected revenue for the past three years is about $2.1 million, according to figures from city-parish government.
The City-Parish Council in July approved a new collection strategy that calls for the City-Parish Attorney’s Office to file lawsuits to recover the fines.
The amnesty period would offer a driver until April 30 to pay late traffic camera fines without penalty.