David Jacobs / The Center Square
Gov. John Bel Edwards signed a number of bills into law over the past few days, including one that makes it easier for taxpayers to get refunds of taxes paid under an unconstitutional or misapplied law.
Senate Bill 198 is far from the highest-profile bill signed this week, but some supporters of the change thought Edwards might consider a veto. His administration had expressed concerns about the unpredictable costs it could create for state government.
The bill by Sen. Barrow Peacock, a Bossier City Republican, started life as an even lower-profile measure having to do with the disbursement of the state catalog tax, the administration of the state Board of Tax Appeals, and refunds related to the Combat-Injured Veterans Tax Fairness Act of 2016.
The state House of Representatives amended the bill to include the goals of House Bill 265 by Rep. Phillip DeVillier, R-Eunice, which sought to require tax collectors to pay refunds when taxes are overpaid as a result of an unconstitutional law, invalid or unenforceable rule or regulation, or because of a misinterpretation of a law or rule. HB 265 had been bottled up in committee.
Under prior law, taxpayers could pay a disputed tax under protest and sue the state for a refund. Failing that, they could also file a claim with the Board of Tax Appeals, though if successful the Legislature still had to appropriate the money to repay.
Now, if a tax is collected under a mistake of law, taxpayers are entitled to a refund plus interest and can collect by filing the proper paperwork with the Department of Revenue, no lawsuit necessary.
Supporters said the change benefits individuals and small businesses who might not think to pay a tax under protest because they don’t have accountants and lawyers telling them a tax might be unconstitutional. Sen. J.P. Morrell, D-New Orleans, said during a Senate floor debate that the bill could lead to unforeseen consequences and cause a “giant hole in the budget.”