Louisiana – School Board Required to Collect Unpaid Taxes

 2/06/2013

SALT Report 2122 – The Louisiana Attorney General issued an opinion regarding the East Feliciana School Board’s failure to collect past due sales and use taxes.  At issue in this case is an ordinance passed by the School Board that created an exemption from sales and use taxes for certain services.  After a three year period the exemption expired and the tax was put back in place. However, several businesses failed to collect and remit taxes to the School Board for the sales of these services.

In his opinion the Attorney General referred to Article VII, Section 14, of the Louisiana Constitution which prohibits the state or any political subdivision from “loaning, pledging, or donating funds, property, or things of value to or for any person, association, or corporation.” The AG explained that the School Board is constitutionally required to pursue the unpaid tax, and failure to do so would amount to a “gratuitous alienation of property or a thing of value and therefore would be an unconstitutional donation.”

Therefore, since the taxes are legally owed to the School Board they are required to pursue the collection of any and all unpaid sales and use taxes.  However, the AG noted that if the Board determines that the benefit or value of recovering each disputed tax would be less than the costs associated with collection the Board can elect not to proceed with collections.

For Further Information

Louisiana Attorney General – Opinion No. 12-0169