Did Arcadia owe the school board a tax-collection commission on vehicle taxes collected by the state?

Plain-English summary

Arcadia asked whether it owed the Bienville Parish School Board a collection commission on sales tax from vehicle purchases when the state Department of Public Safety collected that tax. The 2013 opinion said no collection commission was due to the Board for taxes collected by the state. The Board received and distributed the state's remittances, but it did not itself collect the vehicle taxes.

The AG distinguished that commission from a separate, reasonable handling fee. The opinion said the Board and Arcadia were free to make an intergovernmental agreement for a fee to handle payments received from the state.

Currency note

This opinion was issued in 2013. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Historical summary

Town finance officers

The opinion treated collection as the decisive fact. Because DPS collected the vehicle tax and forwarded the proceeds, the school board was not entitled to a commission as the collector of those particular taxes.

School board tax office

The Board's distribution work did not convert it into the tax collector. The AG nevertheless allowed the town and Board to agree on a reasonable handling fee for receiving state payments.

Common questions

Did the Board earn a commission by receiving and distributing the tax?

No. The AG said DPS collected the vehicle taxes, while the Board handled the proceeds after remittance.

Could the Board charge anything for handling the money?

The opinion said Arcadia and the Board could enter an intergovernmental agreement for a reasonable handling fee.

Did DPS itself withhold a collection amount?

The statute and agreement quoted in the opinion allowed DPS to withhold one percent of taxes it collected to cover collection and remittance costs.

Background and statutory framework

The opinion quoted La. Rev. Stat. 47:303 on collection of vehicle sales and use taxes by the vehicle commissioner. It reviewed the Bienville political subdivisions' agreement with DPS, under which DPS collected and remitted the proceeds less its stated collection amount. The AG relied on an earlier opinion about a sheriff receiving vehicle-tax checks collected by DPS.

Citations

• La. Rev. Stat. 47:303: vehicle sales-tax collection provision.
• La. Atty. Gen. Op. No. 05-0348: earlier commission analysis relied on by the AG.

Source

• Landing page: https://www.ag.state.la.us/Opinions
• Original PDF: https://www.ag.state.la.us/Opinion/Download/13-0038

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain — the linked PDF is authoritative.

~tat~ of Ifiouisiaua
DEPARTMENT OF JUSTICE
P.O. BOX 94005
BATON ROUGE
70804-9005
JAMES D. "BUDDY" CALDWEll
ATIORNEY GENERAL

July 25, 2013
Opinion 13-0038

         Hon. Eugene Smith                             160       TAXATION - Sales Tax

Mayor, Town of Arcadia
La. Rev. Stat. 47:303
P.O. Box 767
The Bienville Parish School Board is not entitled to a fee
Arcadia, LA 71001
or commission on taxes collected by the Department of
Public Safety.

Dear Mayor Smith:

Your opinion request has been assigned to me for research and reply. You have asked for our opinion on a matter related to the collection of sales taxes.
According to your request, the Bienville Parish School Board ("Board") serves as the tax collection agency for Bienville Parish. Specifically, you ask the following question: Since the Louisiana Department of Public Safety and Corrections ("DPS") collects the sales taxes on vehicle purchases for the Town of Arcadia, is Arcadia obligated to pay the 1 ~% the Board charges for collecting sales taxes?

Our office addressed a similar question in Attorney General Opinion No. 05­ 0348. There, we were asked by the St. Helena Parish Sheriff's office whether the Sheriff was entitled to commissions on the sales taxes remitted by DPS. In his request, the Sheriff indicated that DPS remits the sales taxes collected on vehicles to the political subdivision that imposed the tax. DPS then issues checks made payable to the different political subdivisions and mails the checks to the Sheriff as the central tax collector. The Sheriff deposits the monies into the sales tax accounts, and at the end of the month, the Sheriff collects its commission and issues checks to the different taxing bodies. The Sheriff asked for our opinion as to whether he was entitled to commissions on the sales taxes remitted by DPS.

In our response, we recognized that the acts passed by the particular taxing bodies at issue authorized the Sheriff to collect sales taxes on behalf of the taxing bodies. The acts further provided that the Sheriff was to receive a fee or commission on the sales taxes collected by the Sheriff. However, it was our opinion that the vehicle tax was not collected by the Sheriff. Rather, the vehicle tax was collected by DPS in accordance with its contracts with the taxing bodies, and DPS then forwarded checks to the taxing bodies care of the Sheriff.
Therefore, it was our opinion that because the Sheriff did not collect the taxes remitted by DPS, the Sheriff was not entitled to a fee or commission on those taxes. La. Atty. Gen. Op. No. 05-0348.

Page 2

Opinion 13-0038
Hon. Eugene Smith
Page -2­

La. Rev. Stat. 47:303 governs the collection of sales and use tax on vehicles and provides, in pertinent part, the following:

(B)(3)(b)(i) The vehicle commissioner and the governing body of any political subdivision as defined in Article VI, Section 44(2) of the Constitution of Louisiana, in which a sales or use tax has been imposed by such political subdivision on the sale or use of motor vehicles, shall enter into an agreement by which the vehicle commissioner shall collect such tax on behalf of the political subdivision. Except as provided in Paragraph (5) of this Subsection, no certificate of title or vehicle registration license shall be issued until such local tax is paid.

(ii) The tax imposed by the political subdivisions on the sale or use of vehicles subject to the Vehicle Registration License Tax Law (R.S. 47:451 et seq.) shall be collected by the vehicle commissioner and distributed to the political subdivisions as provided for in R.S. 47:301 (1 O)(f) and (18)(b). The vehicle commissioner shall withhold from any such taxes collected for the political subdivisions one percent of the proceeds of the tax so collected, which shall be used by the commissioner to pay the cost of collecting and remitting the tax to the political subdivisions.

Our office has been provided a copy of the agreement referenced by La. Rev. Stat. 47:303(B)(3)(b)(i) ("Agreement"). Our reading of the Agreement reveals that it is executed by and between the Undersecretary of DPS on behalf of DPS and the Vehicle Commissioner, and all the political subdivisions within Bienville Parish, represented therein by the Board. The Agreement between the Board and DPS provides that as compensation for its service and to pay the cost of collecting and remitting the taxes, DPS is authorized to withhold from the taxes collected one percent (1 %) of the proceeds of the taxes so collected. DPS is required to remit to the Board the proceeds, less this one percent (1 %), each month for distribution to the appropriate taxing jurisdictions within Bienville Parish. The Agreement also requires DPS to post information that enables the Board to distribute the proceeds to the appropriate taxing jurisdictions each month.

In accord with Attorney General Opinion No. 05-0348, it is the opinion of this office that because the Board does not collect the taxes remitted by DPS, the Board is not entitled to the fee or commission for collecting those taxes as provided by La. Rev. Stat. 47:303(B)(3)(b)(ii). Nevertheless, it is also our opinion that the Board and Town of Arcadia are free to enter into an intergovernmental

Page 3

Opinion 13-0038
Hon. Eugene Smith
Page -3­

agreement whereby the Board may charge a reasonable handling fee for receiving payments from DPS.

We trust this adequately responds to your request. However, if our office can be of further assistance, please do not hesitate to contact us.

BY:

JDC/MJV/chb