After several local business owners and the president of the Greater Lafayette Chamber of Commerce voiced their opposition, an introductory ordinance that would have repealed the 2 percent rebate offered to merchants for collecting and remitting sales taxes in the city and unincorporated parish was defeated on a 4-4 vote. The vote cut along party lines, with the Republican councilman voting against the repeal and the Democrats voting in favor. (Councilman Don Bertrand of District 7, a Republican, was absent from Tuesday’s meeting.)
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. But the overwhelming sentiment of the business owners who addressed the council was that the rebate is not an incentive — it’s reimbursement for doing a job for local government. Most indicated that the 2 percent rebate doesn’t cover the cost of collection.
“Now, I don’t know how to look at this differently, but we don’t ask the employees of our own government to pay for their expenses out of their own pocket to do the work for government, and yet you’re asking people who are forced by law to collect the tax — by taking away this compensation — to pay the expense of doing a job for you, yet in no way compensating them, and that doesn’t make sense — there’s no fairness to that,” said Lafayette business owner Jay Smith.
Other local merchants estimated that it takes up to 30 staff hours per month to perform the tax-collecting function for government.
The ordinance was originally before the council in February, but it was tabled amid opposition from business owners and concerns from the Greater Lafayette Chamber of Commerce. It was on the agenda again two weeks ago but was tabled again due to the unexpected death of Councilman Kevin Naquin’s grandfather. (Naquin was a co-sponsor along with Jay Castille of the ordinance.) Typically introductory ordinances are voted on in batches — and considered individually two weeks later when they come before the council as final ordinances — and seldom receive individual discussion and public comment. But the controversial nature of the Castille/Naquin rebate repeal led to it being pulled aside and voted on separately from the rest of the intro ordinances.
A repeal of the rebate would have brought in roughly $1.5 million for both the city and the parish, which operate on separate budget
To watch a streaming video of last night’s council meeting, click here.