La. Tax on Small Biz Deemed Unconstitutional - LDR says "too bad" on $70M paid into it

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A court ruling last week means Louisiana residents, also doing business in Texas, who were taxed multiple times on income from their LLC or S corporations should look into getting a tax refund, according to the Louisiana Association of Business and Industry.

But the Louisiana Supreme Court last week ruled the act unconstitutional, saying it violates the Commerce Clause of the U.S. Constitution because the total tax burden on interstate commerce was higher than the burden on business conducted within the state.

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“From our perspective, we think the state has collected somewhere between $60 million and $80 million on this unconstitutional tax,” says LABI President Stephen Waguespack, referencing the fiscal note attached to the 2015 legislation that predicted $33.6 million in annual tax revenue.

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However, during a meeting of the Revenue Estimating Conference this morning, department secretary Kimberly Robinson said they weren’t expecting to dole out refunds to anyone who didn’t pay under protest.

“One taxpayer paid under protest and received $23,000, but there are no other payments under protest,” Robinson said. “You have to pay under protest to challenge the statute. If the taxpayer already filed a return and did not pay it under protest, they would have to file a claim at the Board of Tax Appeals, and that’s somewhat limited also.”

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