For over a year now, the Sales Tax Streamlining and Modernization commission has been attempting to simplify the way Louisiana collects sales taxes.
On Tuesday, the commission focused on the state’s ten private nonprofit universities. Typically, they’ve been exempt from paying sales tax. But that changed in the special sessions, when many exemptions were temporarily suspended. Chairwoman Julie Stokes says that’s not how most states operate.
“Forty-three states treat higher education institutions equally as it pertains to state sales and use tax,” she explained.
Tommy Screen is with the Government and Legal Affairs department at Loyola University in New Orleans, where six of the state's ten private nonprofit universities are located. He says the changes are costing them money they used to be able to save.
“Annually, it’s anywhere between $400,000 and $500,000 to our campus,” he says.
Out of the fifty states, Louisiana has the most complicated method of collecting sales tax. And it was made even more complicated during the special legislative sessions. In an effort to raise more money, the Legislature added one additional penny with no exemptions, and removed some exemptions from half of the existing 4-cent state sales tax.
“We have tended in the past to push complication of what is and isn’t taxable down to the vendors,” says Stokes. The goal of the commission is to change that.
The commission approved a recommendation that would allow the private universities to get a refund on their sales tax.
“It might complicate it for state government and the ten universities, but it will simplify it for every small businesses you represent that sells to those universities,” Stokes told the members.
But there’s no guarantee the Legislature will approve the refunds, which could leave private nonprofit universities being treated more harshly under the Louisiana tax code than their public higher education counterparts.