[Editor's Note: The council on Tuesday night approved the introductory ordinance below, without discussion, as part of a batch of intro ordinances. Discussion of and a vote on the ordinance for final adoption will take place Feb. 5.]

Business within the city of Lafayette and unincorporated parts of the parish stand to lose a 2 percent rebate they’re given for remitting sales taxes to the school board in a timely manner. The City-Parish Council will vote Tuesday night on an introductory ordinance that eliminates the rebate, which for 2011 cost city-parish coffers more than $1.5 million. The rebates are offered on three long-standing sales taxes — two levied in the city (approved by voters in 1961 and 1985) and one collected in the unincorporated parish (approved in 1972).

In a memorandum to the council, Director of Traffic and Transportation Tony Tramel notes:

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. Specifically, 2% of the total sales tax collected by each vendor is rebated to the business, if the sales tax is provided in a timely manner to the Lafayette Parish School System Sales Tax Division.

Recent opinions from our City-Parish attorneys indicated 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, notwithstanding the approved original ordinances which permits [sic] this action.

Tramel points out that four governmental bodies in the parish — the school board and cities of Carencro, Scott and Youngsville — eliminated similar sales tax rebates as recently as 2011.

Read the full ordinance here.

This table from Ordinance 019 shows that more than $1.5 million in sales taxes were lost to the rebates in 2011.
LCG_tax_table

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