Louisiana House Bill HB9

Louisiana 2016 1st Special Session

• Introduced: 2/12/16
• Refer: 2/12/16
• Refer: 2/14/16

Caption

Provides for the amount of dealer's compensation for collection and remittance of state sales and use taxes (Item #21) (OR +$8,000,000 GF RV See Note)

Impact

The significance of HB 9 lies in its potential effect on state revenue and the financial landscape for dealers. By capping the compensation at $1,000 per month, the bill may create a more predictable and controlled expense for state tax collection. This could benefit state financial management but may be viewed unfavorably by those dealers who could previously earn more based on their sales volume. A shift in the compensation structure may also prompt dealers to reassess their business strategies in relation to sales tax collection.

Summary

House Bill 9 aims to amend existing legislation concerning dealer compensation for the collection and remittance of state sales and use taxes. The bill proposes a monthly compensation limit of $1,000 for dealers, regardless of how many business locations they operate. Currently, dealers are allowed to retain 0.935% of the taxes collected as compensation, which is intended to incentivize timely reporting and payment of these taxes to the state. This legislative change is expected to provide a more structured approach to how dealers manage tax compensation.

Sentiment

Sentiments surrounding HB 9 appear to be mixed. Supporters of the bill advocate for its ability to streamline compensation while ensuring state revenue flow remains steady. They argue that it provides a fair and standard compensation framework that aligns with the state's financial needs. However, opponents may express concerns that the cap could disproportionately affect smaller dealers or those operating with lower sales volumes, potentially leading to financial strain for some businesses that rely heavily on sales tax compensation.

Contention

One notable point of contention pertains to the balance between supporting state revenue and ensuring fair compensation for dealers. Critics might argue that the fixed cap undermines the dealers' ability to receive adequate compensation reflective of their actual workload in terms of tax collection and reporting. Furthermore, there could be concerns related to how municipalities can compensate their sales tax dealers, especially if local governments wish to exceed the state-mandated limits. This raises questions about local autonomy versus state regulation in tax matters.