An ordinance that repeal a rebate given to local merchants for collecting and remitting sales taxes in a timely fashion has been deferred yet again. The ordinance — No. 117 — has been pushed back until June 18 due to the unexpected death of Councilman Kevin Naquin’s grandfather. Naquin, a co-author of the ordinance along with Councilman Jay Castille, is not expected to attend tonight’s meeting. Had the introductory ordinance been approved tonight it would have faced a final vote by the council on the 18th.

The ordinance was originally before the council last February but was deferred by Castille and Naquin amid some opposition by local tea party representatives and at the request of the Greater Lafayette Chamber of Commerce, which asked that more time be given to consider the ramifications on local businesses. 

"Some businesses only get $300 a year. If that’s going to break that business, that business needs to look at its business plan and revamp it. Come on, man." — Councilman Jay Castille

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.

Castille says since the ordinance was originally deferred, he’s heard no complaints about its impact on businesses. “I haven’t gotten any negative feedback from anyone to tell you the truth,” Castille says. “I haven’t any business owner call me and complain about it.”

According to LCG figures, 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as recently as 2011, the cities of Carencro, Scott and Youngsville, along with the Lafayette Parish School Board, have repealed rebates offered to merchants for timely collection of sales taxes.

In a memorandum to Castille last December, former Transportation Director Tony Tramel, who retired at the end of march, 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...

Castille says concerns about a repeal’s impact on local businesses are overblown. “As a business owner, you know going into business you have to collect taxes and pay taxes,” he says. “It’s the right thing to do, and I just can’t understand why some of these politicians just don’t see that. ... I pulled the numbers up and I’ll tell you what, some businesses only get $300 a year. If that’s going to break that business, that business needs to look at its business plan and revamp it. Come on, man.”

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