Opinion ID: 1114341
Heading Depth: 1
Heading Rank: 7

Heading: Suspensions of Tax Exemptions

Text: During the pertinent tax assessment periods, the Legislature on several occasions suspended various tax exemptions as to a certain percentage rate of the sales and use tax. BP contends that the suspensions only applied to exemptions from state taxes and not to the exemptions from parish taxes. The trial court observed that La. Const. art. VI, § 29(D) requires all exemptions from sales or use tax to apply uniformly to local governmental subdivisions, to school boards and to the state. [17] Noting that the suspensions do not provide specifically whether they apply to local governments and school boards as well as the state, the court concluded that the Legislature intended for the suspensions of the exemptions to apply equally to exemptions from taxes levied by all taxing authorities. Section 29(D) requires uniformity in application of legislative exemptions from sales and use taxes, whether levied by the state or by local governments or by school boards. Thus, if the Legislature enacts an exemption from sales and use taxes, the exemption must apply to both state and local taxes. Logically, if the Legislature suspends the effect of a statutory exemption, the suspension must also apply uniformly to both state and local tax exemptions. Pointing out that there is no requirement for uniformity of tax rates, BP argues that, at the time of the suspensions, the rate for state sales and use taxes was four percent, but the local rates varied from parish to parish, the rate under the Plaquemines Parish ordinance being one percent. Further noting that the Legislature never suspended the entire exemption from sales and use tax, BP contends that the legislative suspension of a part of the statutory exemption as to the rate of state sales and use tax, without a corresponding suspension of the exemption from local taxes, did not violate the requirement of uniformity imposed by La. Const. art. VI, § 29(D), since there was always a state exemption in effect. When the Legislature suspended the exemption of part of the rate of the state sales and use tax, the constitutional requirement of uniformity of application mandated that a proportionate part of the rate of local sales and use tax exemptions was also suspended. Thus, if the state tax rate was four percent and the Legislature suspended the exemption on two percent, then the corresponding effect was to suspend the exemption on one-half of the local tax rate. Because there were various types of suspensions applicable at various times, it is appropriate to remand the case to the trial court for rendition of a new judgment on this issue consistent with this opinion.