Federal Money and Sales Tax Collection Among Issues Facing Lawmakers

Should Louisiana adopt a centralized system of collecting sales taxes, especially on purchases made on internet purchases? How do we effectively spend federal funds the state is getting as part of various COVID relief packages? And what changes ae needed to deal with how property insurance is handled in the state? Those are some of the issues District 22 Representative Gabe Firment sees as top issues when the Louisiana Legislature convenes in a fiscal session next month.

Firment spoke with The Journal about these issues. He noted that Louisiana is one of only a few states that do not have centralized sales tax collection. He said this is a top priority of House Speaker Clay Schexnayder. Firment said, “We are behind and desperately in need of reform of sales tax collection. I don’t know if the speaker can pull it together to get it passed.” Firment added that the speaker and the Senate President Page Cortez of Lafayette worked together last year on tort reform bills. And he hopes they can work on together on sales tax collections.

“There are some concerns about centralizing the collection of sales taxes,” said Firment. He added, “Some sheriffs and school boards are concerned about administrative costs of doing it. And some are worried that they might miss out on some tax revenue.”

In the case of South Dakota v. Wayfair, Inc, the US Supreme Court ruled that a state may charge tax on purchases made from out-of-state sellers. There has been discussion of the feasibility of each parish being able to collect sales tax on internet transactions or would the collection have to be done by a centralized agency. Firment told The Journal, “Right now Louisiana and one other state do not have centralized collection. Other states are doing it.”

Federal stimulus and COVID recovery bills will send billions of dollars into Louisiana. Firment said, “The state will be getting about 3-billion dollars and the local governments will get another 2-billion dollars. I don’t favor the federal government spending as much as they are.” Firment added, “But if we get it, we should spend it wisely, and not spend it on recurring expenses. One time money should be spend on infrastructure repairs or building up the Unemployment Trust Fund. That was depleted with all of our citizens out of work due to the COVID outbreak and business shutdown. We borrowed from the federal government to keep the fund afloat. We also have some 1-billion in debt left over from the state borrowing federal money for Katrina recovery. We could pay off that.”

Firment said, “We have a unique opportunity to take care of some of these things. I and other conservative legislators feel that when tough decisions have to be made, we need to make the fiscally responsible decision.”

He is drafting bills dealing with property insurance. Firment said, “I was an insurance claims adjuster for over 20 years. We had problems after Hurricane Laura with a shortage of claims adjusters. Many have been forced out because the insurance companies did not want to pay.”

Firment said, “The companies attempt to deny or drag out claims as long as possible. They want to hold onto premium money because they invest it. If they can give people who had losses the run-around or low-ball the estimate of damage it delays paying a claim. This gives the insurance company longer to earn interest on that money.” The Journal asked what the answer is. Firment said, “We have to give the companies an incentive to do what’s right.”

The Legislature will convene on Monday April 21st. The session will run until Thursday, June 10th.