The Lafayette City-Parish Council will revisit on Tuesday an ordinance that would repeal a 50-year-old law giving retailers in the city and unincorporated parish a cut of the sales tax action.
The Lafayette City-Parish Council will revisit on Tuesday an ordinance that would repeal a 50-year-old law giving retailers in the city and unincorporated parish a cut of the sales tax action. Since the early 1960s when the city first began levying a sales tax - the parish began levying a sales tax in 1972 - merchants were given a 2 percent rebate in taxes collected as an incentive to turn the taxes over to government in a timely fashion.
The ordinance was originally before the council in February, but it was tabled amid opposition from local tea party representatives and concerns from the Greater Lafayette Chamber of Commerce.
In a December 2012 memorandum to Councilman Jay Castille, one of the sponsors of the ordinance along with Councilman Kevin Naquin, former Director of Traffic & Transportation Tony Tramel, who retired at the end of March, estimates repealing the rebate would generate $1.4 million in additional revenue for the city of Lafayette and $104,000 for the parish.
According to LCG figures compiled by Tramel, the sales tax rebate to vendors for the year February 2011 through January 2012 amounted to more than $1.5 million for both the city and the parish, which operate on separate budgets.
As long ago as 1994 and as recently as 2011, the cities of Carencro, Scott and Youngsville, along with the Lafayette Parish School Board, have repealed rebates offered to merchants for timely collection of sales taxes.
Tramel also questions the legality of the sales tax rebates to merchants:
It appears the 2% rebate provision to vendors was included in the original ordinances to appease the retail community regarding their effort to collect, administer and remit the approved sales tax. ...Recent opinions from our City-Parish attorneys indicate government cannot donate anything of value to others, which raises the question as to why/how LCG can rebate/donate sales tax dollars to local businesses...
Read the full ordinance here. Tramel's memorandum begins on page 54.