BATON ROUGE, La. — Millions of dollars in Louisiana state taxes have been freed from an escrow account after the chemical industry lost its lawsuit challenging a 2015 sales tax change.

The state treasurer’s office said Wednesday that $15.9 million was transferred to state coffers from the Department of Revenue’s escrow account this week. Lawmakers already have earmarked the money for a list of state expenses, though the joint House and Senate budget committee will have to sign off again before the dollars can head to state agencies.

The state temporarily removed a 1 percent sales-tax exemption for business utilities in 2015, a change that boosted charges for several businesses, but fell most heavily on chemical plants. Chemical companies paid $18.7 million of the increased taxes under protest, however, meaning the money couldn’t be spent as long as a lawsuit filed by the Louisiana Chemical Association challenging the taxes was pending.

The association lost the legal dispute at the district and appeals court levels, and the Louisiana Supreme Court declined to review the case on Sept. 22.

“The denial of the (review) application ended the LCA lawsuit. Therefore, the payments under protest held in escrow were not returned to the taxpayers,” revenue department spokesman Byron Henderson said in an email.

Lawmakers suspended a number of tax breaks in 2015 in order to close budget gaps. The chemical association, which represents companies that operate more than 100 plants across Louisiana, claimed the tax-break suspension for business utilities didn’t receive the required votes for passage in the state House and was unconstitutional. Judges disagreed.

Further changes since have been made to the sales-tax break for business utilities.

The dollars paid under protest by the chemical industry were among $36 million in the revenue department’s escrow account that lawmakers used to fill budget holes in the fiscal year that ended June 30. But the money was tied to ongoing tax litigation and couldn’t be spent until the disputes were resolved.

Besides the $15.9 million transferred for spending this week, another $8.8 million has been moved out of the escrow account so far, according to the treasurer’s office. The dollars are earmarked for the corrections department to pay sheriffs housing state inmates in parish jails, a computer project at the Department of Children and Family Services and health programs.


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