Jindal tax plan prompts discussion Jindal tax plan prompts discussion Associated Press file photo -- Gov. Bobby Jindal speaks at a Republican Party of Arkansas fundraising dinner in Hot Springs, Ark, in July. Top officials in Jindal's administration used personal email accounts to craft a media strategy for cutting Medicaid a method of communication that can make it more difficult to track under public records laws. Local leaders talk revenue sources BY MICHELLE MILLHOLLON| Capitol news bureau April 08, 2013 Comments Mayors, school boards and other local officials want to know how their tax collections will play into Gov. Bobby Jindal’s upcoming tax package. At the center of the conversation is a federal push to capture sales tax when someone buys a birthday gift on Amazon.com or logs onto Barnes and Noble’s website to purchase a book. The Internet is a largely tax-free zone. The University of Tennessee estimated that $11.4 billion in sales tax on e-commerce sales would not be collected in 2012. Last year, U.S. Sen. Mary Landrieu, D-La., backed the Marketplace Fairness Act, which would allow remote sellers to be required to collect and remit sales taxes. To participate, states must join the Streamlined Sales Tax Project, of which Louisiana is not a member, or task a single entity with administering all sales and use tax laws. The bill has not been introduced in the 113th Congress. “This legislation is about fairness to small retailers in Louisiana and around the country that should not be put at a disadvantage against large, online businesses. I will continue to be a strong voice in the effort to pass this bipartisan legislation so that we can level the playing field for all our businesses,” Landrieu said in a prepared statement. The Louisiana Legislature made the sales tax system more uniform in 2003 by making administration of the law the same from parish to parish. However, the state still collects its own taxes and locals collect their taxes, a situation that critics claim is a headache for businesses with locations in multiple parishes. Local officials contend the system works well and ensures dollars are readily available for public services. Efforts to have the state centralize the collection of local sales taxes flared and died in past years. Now, Gov. Bobby Jindal is reopening the discussion by proposing to eliminate the state’s personal income and corporate taxes. Nearly $3 billion in revenue will have to be replaced, sparking the governor’s interest in something he had previously spurned — collecting sales taxes on Internet sales. Collecting those taxes most likely means changes to the state and local sales tax structure. Kimberly Robinson, an attorney with Jones Walker law firm, said all of the bills require some form of centralized collection. The legislation allows for the possibility of a single collector, such as a board, which would oversee state and local collections, she said. Local governments could have a seat at the table, she said. The Jindal administration is looking to bills before Congress that aim to grab tax revenue on Internet sales, said Tim Barfield, executive counsel for the state Department of Revenue. The Jindal administration envisions putting sales tax collections in a new bucket that would have state and local oversight, he said. “We do not want to take over local sales tax collection,” Barfield said. Still, local mayors said they are uneasy about what the governor is contemplating for discussion in the legislative session that begins in April. Mayor-President Kip Holden, of Baton Rouge, said the current tax system works well. “There is no need to centralize it. We’re big boys and girls,” he said. Holden predicted mayors will fight that portion of the governor’s package. Zachary Mayor David Amrhein said he can pinpoint when city dollars are coming, where they’re coming from and what day he will receive them. He said he is adverse to anything that impedes the revenue flow. “They can’t keep messing with the way we do business,” Amrhein said. Bob Rainer, an attorney who represents the majority of local governments and school boards across Louisiana, said his clients are nervous about central collection. Local governments want to preserve the local sales and use tax base that funds schools, law enforcement and other public services, he said. Driving the anxiety is a lack of details from the Jindal administration. The governor has only released broad points of his package. “We hear rumors,” Rainer said. “We read the press. We’ve not seen anything. We have been invited to work with the administration and look forward to it.” Tom Ed McHugh, executive director of the Louisiana Municipal Association, which represents local governments, said there is a state constitutional protection that allows local governments to collect their own tax dollars. “That is a huge issue for us,” McHugh said. “Our money goes straight to our accounts.” McHugh, a former Baton Rouge mayor, said the idea of joint oversight might have merit depending on the details. He said he has had conversations with the administration, but received no concrete details. “We’ve heard so much. We don’t know what he’s going to propose,” McHugh said. “We’re optimistic because they’re talking to us.” The Public Affairs Research Council, a Baton Rouge-based public policy group called PAR, is in the process of studying the state’s tax policies. One of PAR’s initial recommendations is for a centralized, single sales and use tax administration system. PAR’s president, Robert Travis Scott, said very few states handle sales taxes the way Louisiana does. The problem, he said, is that businesses with multiple locations have different tax collectors and different paperwork before even dealing with their state tax obligations. Another concern is online sales that escape taxes and put local retailers at a disadvantage, Scott said. The simplest thing to do would be to let the state collect all sales taxes, he said. “If you do have a new structure that leans more toward sales tax, then you need a good system for compliance,” Scott said. “In the end, the local governments would be better off. They managed to do this in all these other states.” John LeBlanc, the Louisiana Association of Business and Industry taxation and finance director, said his hunch is that the Jindal administration will propose a centralized administration instead of centralized collection. Exactly what that means is unclear, he said. LeBlanc said it may be more of a streamlined, single collection point that allows the state and parishes to act more seamlessly as one. He said his organization has talked to local governments for a few years about consolidating into one local commission for sales tax collection. The next step, he said, would be to include the state and form a consolidated body. “There’s not a huge fiscal note to it,” he said of the possible hurdles. “It’s more political will.” Jordan Blum with The Advocate Washington bureau contributed to this report.