Provides for centralized collection of local sales and use taxes by the Dept. of Revenue (OR +$10,674,073 SG EX See Note)

House Bill 658 amends Louisiana's sales and use tax collection statutes to mandate that all local sales and use taxes be collected by the Louisiana Department of Revenue beginning July 1, 2027. The bill replaces the current system where local taxing authorities can either collect their own taxes or contract with the state for collection services with a centralized mandatory collection model. The secretary of the Department of Revenue becomes the sole collector for all local sales and use taxes statewide, with the bill amending R.S. 47:337.6, 337.16, 337.25, 337.64, and 337.80 and repealing R.S. 47:337.13 and 337.14, which previously authorized optional state collection and established alternative collection mechanisms through local collectors and collection commissions. The secretary is authorized to adopt rules and regulations and prescribe forms consistent with provisions governing state tax collection, and collected revenues are designated as "nonstate tax proceeds" that remain separate from state funds and are not subject to legislative appropriation.

The practical effect of this legislation falls on multiple parties with distinct responsibilities and protections. Local taxing authorities lose direct collection capability but retain full authority over tax administration, enforcement, audits, and refund decisions; the Department of Revenue must transmit collected taxes to local collectors within four business days for electronic payments and twenty days for checks, maintain twenty-four-hour availability of designated staff, provide real-time data sharing systems, and charge a fee not exceeding one-half of one percent of taxes collected. Individual taxpayers gain the ability to appeal local tax assessments to the state Board of Tax Appeals rather than relying solely on local administrative remedies. Parish collectors and collection commissions are required to provide the Department of Revenue with copies of all local tax ordinances by February 1, 2027, and notify the department of any tax changes at least seventy-five days before implementation. Local taxing authorities receive quarterly reports detailing collected taxes, collection costs, and the names and addresses of all taxpayers from whom collection occurred, may request additional reports on delinquent taxpayers, and retain the right to investigate department records no more than twice per year with ten-day response requirements.

This legislation operates within Louisiana's constitutional and statutory framework governing local taxation. The bill is conditioned upon voter approval of a constitutional amendment, as the preamble indicates effectiveness is contingent on adoption of a related constitutional amendment in House Bill No. ____ of the 2026 Regular Session. Louisiana's Constitution currently authorizes political subdivisions to levy sales and use taxes, and the bill preserves this authority while centralizing collection administration at the state level, a structural change requiring constitutional authorization. The legislation maintains alignment with existing state tax collection procedures by making provisions governing state sales and use taxes applicable to local collections under R.S. 47:337, and it preserves local taxing authority autonomy over tax policy and enforcement by explicitly prohibiting the secretary from administering tax levies or enforcing collection except through the collection function itself. The bill's treatment of nonstate tax proceeds as non-appropriated funds distinct from state revenue reflects Louisiana's revenue allocation principles and protects local governments' interests in their tax revenues while centralizing the collection mechanism.