(Constitutional Amendment) Authorizes the legislature to provide by law for the collection of all sales and use taxes imposed by any taxing authority in the state (OR SEE FISC NOTE GF RV)

HB 620 proposes a constitutional amendment that would fundamentally restructure how sales and use taxes are collected in Louisiana by shifting collection authority from individual local taxing authorities to a centralized state system. The amendment amends Article VI, Section 29(A) of the Louisiana Constitution and adds Article VII, Section 3(C) to accomplish this change. Under present law, local governmental subdivisions and school boards that levy sales and use taxes must provide for collection of those taxes by a single collector within each parish. The proposed amendment removes the direct collection authority from local taxing entities and instead authorizes the legislature, by a two-thirds vote in both houses, to enact law establishing a centralized collection system for all sales and use taxes imposed by any taxing authority in the state. The mechanism ensures that collected taxes are promptly remitted to each parish's single collector for distribution to the respective taxing authority, and it preserves the legal separation of local tax revenues from state funds by providing that collected taxes shall not be commingled with state money or considered state funds under constitutional provisions governing the state treasury.

The practical effect of this amendment, if approved by voters and enacted into law by the legislature, would be to consolidate the administrative responsibility for collecting all local sales and use taxes under a single statewide system rather than maintaining the current system of multiple local collectors across the state's parishes. Local governmental subdivisions, school boards, and other taxing authorities would no longer directly collect the sales and use taxes they are authorized to levy but would instead receive distributions from a central collector based on the taxpayers' returns. This restructuring could streamline tax collection administration, reduce duplicative collection efforts, and potentially lower compliance costs for businesses that currently must report to multiple local collectors. However, it would also transfer operational control of collection from local entities to the state, though the collected revenues would remain identified as belonging to and distributed to the respective levying authority.

This proposal operates within the existing constitutional framework that authorizes local governmental subdivisions and school boards to levy sales and use taxes upon voter approval and that requires all local governing authorities levying such taxes within a parish to use a single collector. The amendment modifies but does not eliminate this taxing authority; it preserves the right of local entities to levy and collect these taxes through referendum, but changes who performs the collection function. The amendment expressly protects local tax revenues from being treated as state money under Article VII, Section 9 of the Constitution, which governs the deposit of funds in the state treasury, thereby addressing potential concerns that centralizing collection might result in local revenues being claimed or encumbered as state funds. The amendment requires legislative enactment of any centralized collection system to occur through a two-thirds supermajority vote, a heightened threshold that reflects the constitutional significance of shifting collection responsibility, and it includes a fallback provision preserving the current collection method if no such centralized law is enacted.