Requires the advance payment of sales tax (Item #35) (EG1 SEE FISC NOTE GF RV)
The implementation of HB 54 is poised to significantly alter the landscape of sales tax collection in Louisiana. By instituting an advance deposit requirement, the bill intends to streamline tax collection, minimizing late payments and enhancing compliance among dealers. Furthermore, dealers are given the option to calculate the advance tax deposit using either the actual sales method, where they remit 90% of their sales and use tax liability for the current month, or the estimated sales method, which allows them to remit 75% based on the previous year's liability. This flexibility can ease the burden on dealers while promoting timely tax remittance.
House Bill 54, introduced by Representative Broadwater, aims to require certain dealers to make advance sales tax deposits in Louisiana. It specifically targets dealers whose average monthly sales tax liability exceeds $20,000 during a specified period. The bill mandates that these dealers remit an advance sales tax deposit beginning on April 20, 2016, and continuing on the 20th day of each month thereafter. This initiative seeks to improve the prompt collection of sales tax, ensuring better management of state revenues, which is particularly important for the budgeting process and fiscal planning.
General sentiment surrounding HB 54 appears favorable among proponents who view the advance payment requirement as a proactive measure to bolster state revenue without raising tax rates. However, some industry stakeholders might express concerns about the potential cash flow challenges that advance payments could impose, particularly on smaller dealers who may struggle with liquidity issues. Despite these concerns, the bill gained support, reflected in the House voting record where a significant majority voted in favor of its final passage.
While there was significant support for HB 54, the bill also faced criticism and concerns. Opponents argued that the requirement could disproportionately impact smaller businesses that may lack the resources to maintain sufficient liquidity for advance tax payments. Additionally, there are concerns regarding the potential penalties imposed for non-compliance. The bill allows the Secretary of the Department of Revenue to assess a penalty for late remittance, which some believe could create an additional financial strain on businesses during economic downturns or seasonal fluctuations.