Limits fees charged to Orleans Parish taxing authorities for tax collection services

House Bill 795 amends Louisiana Revised Statutes section 47:337.13(B) to impose a fee cap on tax collection services agreements in Orleans Parish. The legislation adds a new paragraph (2) to the existing subsection that limits fees charged to taxing authorities to no more than five percent of tax collections under intergovernmental agreements for collection services. The bill preserves all existing provisions of current law governing the formation and content of such agreements among taxing authorities, including requirements that agreements be in writing and specify financial obligations, while adding this specific numerical limitation applicable only within Orleans Parish.

The practical effect of this legislation is to restrict the fees that any entity providing tax collection services can charge to Orleans Parish taxing authorities that participate in joint collection agreements. Under the five percent ceiling, a taxing authority that contracts for another entity to collect its sales and use taxes or other levied taxes would have its collection costs capped at five percent of the revenues actually collected. This impacts Orleans Parish taxing authorities, the collecting entities that provide services to them, and the budgeting practices of parish political subdivisions. Any agreement currently in place or negotiated in the future that charges fees exceeding five percent would require modification to comply with this statutory limit.

This legislation operates within the existing framework of section 47:337.13, which authorizes taxing authorities in each parish to enter into intergovernmental agreements for the joint collection, enforcement, and administration of taxes. Prior to this amendment, Louisiana law permitted such agreements but did not establish maximum allowable fees at the parish level, leaving fee structures to be determined through negotiation between parties. The bill creates a parish-specific constraint on fee arrangements while maintaining the voluntary nature of inter-taxing authority agreements and the requirement that such agreements contain written documentation of financial obligations and prevent unauthorized donations of public funds or services.