Louisiana Senate Bill SB529

Louisiana 2018 Regular Session

• Introduced: 4/3/18
• Refer: 4/4/18
• Report Pass: 4/9/18
• Engrossed: 4/11/18
• Refer: 4/12/18
• Report Pass: 4/16/18
• Enrolled: 5/9/18
• Chaptered: 5/15/18
• Passed: 5/15/18

Caption

Provides for direct payment of state and local sales tax due on purchases by certain nonprofit subsidiaries. (7/1/18) (EN NO IMPACT GF RV See Note)

Impact

Should this bill be enacted, it could significantly alter the way nonprofit organizations handle sales taxes in Louisiana. The bill establishes a framework under which qualifying nonprofit subsidiaries can directly obtain payment numbers, which means that they may circumvent some of the complexities related to sales and use tax that typically pose challenges for such organizations. Furthermore, the bill mandates that these organizations, in aggregated annual taxable purchases, must meet a substantial threshold of ten million dollars over specified periods to qualify for the direct payment numbers.

Summary

Senate Bill 529 aims to amend Louisiana's tax code to allow certain nonprofit subsidiaries to obtain direct payment numbers for state and local sales and use tax purposes. This initiative is particularly targeted toward private, nonprofit, tax-exempt organizations defined under Section 501(c)(3) of the Internal Revenue Code. By facilitating direct payments, these organizations can manage their taxes more effectively and potentially reduce operational costs associated with sales tax compliance.

Sentiment

The sentiment surrounding SB 529 appears to be generally favorable, particularly within the nonprofit sector. Proponents argue that the bill simplifies tax procedures for organizations that are crucial for delivering community services, especially in healthcare. This sentiment is echoed by discussions indicating a recognition of the operational burdens faced by nonprofits when dealing with sales tax processes. However, while support is evident, the limited dissent mainly revolves around concerns regarding the oversight of tax provisions and the implications for local tax agencies.

Contention

Despite the overall support for SB 529, there are notable points of contention. Critics of the bill may raise issues regarding the potential financial impacts on local governments, which rely on sales taxes as a significant revenue source. Additionally, there are worries about the robustness of the auditing process involved in verifying taxpayer qualifications for obtaining the direct payment numbers. The balance between promoting nonprofit efficiency and ensuring fiscal responsibility for local jurisdictions remains a critical discussion point.