Oil lobbyists convince legislators to abolish sales tax
Some seemingly minor word changes in a bill that has snuck its way through the Louisiana Legislature potentially could cost residents of St. Charles Parish $500,000 dollars per year in sales tax revenue. However, the losses do not stop there, as total tax revenue losses for all coastal parishes involved could top $20 million annually. The bill essentially abolishes the sales tax on the diesel that ships purchase while at Louisiana ports. In addition, any goods or services they use while in port are tax-free. Ships that transport goods to the Port of Louisiana, located in St. Charles and St John. Parishes, purchase an enormous amount of diesel fuel.
Breezing through the Senate 39 to 0, a significant change in sales tax collection has begun.
House Bill No. 60–which showed up unexpectedly on Governor Blanco’s special session docket–is out of place with the rest of bills for consideration, as they deal primarily with Hurricane Katrina and Rita-related issues.
The bill would benefit the river transportation industry, including grain, oil and gas.
The bill also comes at time when Governor Blanco is pleading with the federal government to release the revenues for Louisiana’s oil and gas industry to help rebuild after two major hurricanes.
“The Governor determines what is going to be heard at the special session,” said St. Charles Parish Director of Tax Collection Paula Jeansonne, Because the special session was meant to deal with hurricane issues, the arrival of this bill surprised Jeansonne.
The bill flew through house 101 to 0, with local Reps. Ernest Wooten-R and Gary Smith-D voting in favor, before it headed on to the Senate floor Wednesday, where local Sen. Joel Chaisson also voted in favor.
Jeansonne made numerous trips to Baton Rouge to beseech any representatives not to support this bill, particularly because the amount of revenue that St. Charles Parish Schools receive from sales tax. She also worked with industry to draft something more favorable for residents. However, industry remained reluctant to modify the bill. Ultimately, the trips proved unsuccessful.
Jeansonne believes that changed bill will be tied up in the courts for several years, as the courts decides the law’s intent, allowing industry to take advantage of the lapse.
Introduced by Rep. John Alario-D, Westwego, the bill clarifies language in an older bill from 2002; it excludes barges from paying sales tax on ships supplies, along with ships, vessels and drilling barges. Originally, the bill only included ships and vessels. Now, with barges added, especially drilling barges, the complexity and the benefit to local shipping industry increases dramatically. One major benefit to industry is that would have not pay sales tax on diesel fuel on a state level, nor would they have to pay for sales tax on materials, repairs and supplies at the state and local level. Of the 5 percent sales tax collected in St. Charles Parish 3 percent goes to St. Charles Parish School Board.
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