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Louisiana Town Collects Expired Sales Tax

  • Mar 7, 2014 | Gail Cole

 Louisiana town collects $600,000 in sales tax that it wasn't authorized to collect.

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Sales tax can be a nightmare for businesses selling into multiple jurisdictions. Frequently changing rates, boundaries, and exemptions force businesses to stay on their toes. Collect the incorrect amount of tax and beware the auditor, who may come bearing penalties and exemptions.

Is sales tax equally challenging for the jurisdictions that impose it? For at least one town, it seems to be.

According to a June 2013 audit report for the Town of Merryville, Louisiana:

“The Town has been collecting two 1% sales taxes that were authorized by sales tax propositions to be collected through June 30, 2007. The Town has had no legal right to these funds since June 30, 2007. … The Town collected approximately $600,000 of sales taxes during these years that they were not legally authorized to collect.”

How does this happen?

The auditor explains:

“The sheriff who collects the sales taxes for the town had a schedule of expiration dates for the town’s taxes, but a typographical error showed the expiration date as June 30, 2017, therefore he continued to collect the tax” [emphasis mine].

The June 2013 report notes that corrective action has now been taken. To prevent such an error from recurring in the future, the auditor suggested Merryville “implement a system to track expiration dates of sales taxes,” and pass the system to subsequent administrations. This seems like sound advice, especially since the tax was erroneously collected after the town’s June 2012 audit report uncovered it.

Don't over collect sales tax. Automate.

photo credit: Alex E. Proimos via photopin cc

Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.