Louisiana House Bill HB43

Louisiana 2016 1st Special Session

• Introduced: 2/14/16
• Refer: 2/14/16
• Report Pass: 2/23/16
• Engrossed: 2/25/16
• Report Pass: 2/29/16
• Enrolled: 3/9/16
• Chaptered: 3/10/16
• Passed: 3/10/16

Caption

Provides for the amount of vendors compensation authorized as compensation for the collection and remittance of state sales and use taxes (Item #21) (EN +$6,400,000 GF RV See Note)

Impact

The impact of HB 43 on state laws primarily revolves around the incentive structure for vendors responsible for collecting and remitting sales taxes. By adjusting the compensation mechanisms, the bill intends to align vendor incentives with the goal of timely tax remittance, thereby optimizing revenue flow to the state. Furthermore, the effective date of April 1, 2016, means that all taxable transactions occurring from this date onward will be subject to the revised compensation structure, thereby impacting both new and existing vendors operating within Louisiana.

Summary

House Bill 43 aims to amend Louisiana's sales and use tax laws by providing for adjustments in the amount of dealer compensation that vendors can claim for accounting for and remitting the tax. The bill proposes that vendors may retain .935 percent of the tax they remit to the state as compensation for their accounting efforts, while capping the total compensation for any vendor at $1,500 per month. This change aims to streamline the tax reporting process for local businesses while ensuring that the state continues to receive the necessary revenue from sales tax collections.

Sentiment

General sentiment regarding HB 43 appears to be positive, particularly among small business owners and vendors who may benefit from the adjusted compensation. Proponents view the amendments as a practical measure to lessen the financial burden on businesses tasked with sales tax reporting, enabling them to allocate resources more efficiently and potentially enhance compliance with state tax laws. However, there may be concerns among larger corporations or entities that handle higher volumes of sales tax receipts, as the capped compensation may not adequately reflect their operational costs.

Contention

While the overall reception of the bill seems favorable, notable points of contention include discussions on the fairness of the compensation cap and its sufficiency to cover the administrative costs incurred by vendors, especially for those operating multiple locations. Representatives from various sectors have expressed differing opinions on whether the cap of $1,500 sufficiently addresses the needs of all vendors, or whether it could unintentionally disadvantage larger businesses that manage more complex tax situations. These discussions are crucial as they highlight the balance between state revenue needs and the operational realities faced by vendors across Louisiana.