By LEONARD GRAY

LULING – St. Charles Parish’s sales tax office is still battling for nearly a half-million dollars in sales taxes, now held in an escrow account, from Archer Daniels Midland Co.

Roy Lilly Jr., representing the St. Charles School Board and St. Charles Parish, has pursued the matter since 1991. On March 8, the Louisiana Supreme Court denied an appeal for rehearing filed by ADM, and the company instead pursued action in the recent Louisiana legislative session.

“ADM hates paying taxes,” Lilly commented, and added of the senate votes (unanimous by those present), “I don’t know how they did it.”

“It was a disaster,” added school board spokesman Rochelle Touchard, who was present for the devastating votes on the bills.

Senate Bills 62 and 70, sponsored by Sen. Art Lentini, defined foreign interstate coastwise commerce for purposes of state and local sales tax exemption and then exempted certain shipbuilding materials, equipment and machinery from state and local sales taxes. Both were signed June 27 by Gov. Mike Foster as Acts 40 and 41.

The acts, Lilly said, retroactively deny taxes already paid, “which is illegal.”

The case comes down to tugboats and their use. According to Lilly, ADM refuses to pay sales taxes on tugboats, claiming their use was in interstate and foreign commerce, entitling them to a tax exemption. However, some tugboats operate wholly within Louisiana and some completely within St. Charles Parish, which does not exempt them from payment of taxes, the high court ruled.

The Fifth Circuit Court of Appeals had sided with ADM, and the parish school board appealed to the state supreme court. They were joined in the appeal by other parishes along the Mississippi River, including St. John Parish.

Lilly, on behalf of the school board, sent letters to senators, protesting their votes, in which he enclosed legal opinions on the matter and asking them to call upon Foster to veto the Acts. The state supreme court originally ruled in the parish’s favor on Nov. 28, 2001, and ADM filed for a rehearing, which was ruled upon March 8.

ADM had placed $400,000 in an escrow account which the parish could eventually collect. The acts approved by the legislature and signed by the governor “are certainly unconstitutional,” Bob Lorio, of the tax office, said.

The legislature, by law, is not allowed to change methods “for the collection of debts,” or “exempting property from taxation,” or “regulating the management of parish or city public schools, the building or repairing of parish or city schoolhouses, and the raising of money for such purposes,” Lilly said.

In addition, Lilly said, the legislature “shall not indirectly enact special or local laws by the partial repeal or suspension of a general law.”

At risk to the company is, if St. Charles Parish is eventually successful, other parishes and counties along the length of the river may file to collect their own taxes which may be due.

Lilly, in a letter to Supt. Dr. Rodney Lafon of St. Charles Parish Schools, commented: “We have a policy of not bluffing. We also have a policy of treating all taxpayers fairly and equally. If we are collecting from a group of taxpayers, or a single taxpayer, we will insist on payment from any taxpayer in a similar situation, even though the amount at issue may be less than justified by the expense of collection. Our mission calls for fair enforcement. As a result of this policy, St. Charles Parish collects a large amount of taxes.”