La. FEMA Trailer Purveyor Sued for Back Taxes
The Louisiana Department of Revenue is suing a St. Rose company that sold $120 million worth of travel trailers to the Federal Emergency Management Agency (FEMA) in the months after Hurricane Katrina, saying it owes more than $400,000 in back taxes, interest and penalties.
The Times-Picayune, New Orleans, reported that the lawsuit claims Bourget’s of the South owes the state $281,000 in taxes, plus interest and penalties from the sales.
Glen Smith, a partner in the company, along with Gary Smith Sr., said Thursday (Dec. 20) that the suit only covers the tax that would have been owed on 211 of the 6,212 trailers that the company acquired for FEMA after the storm. “We didn’t have a license for 23 days,” Smith said. “If it turns out that we owe the taxes, we’ll pay them.”
Licensed dealers do not have to pay sales taxes on the resale of trailers.
But Smith said the company is arguing that it was a broker for FEMA and not a vendor in the conventional sense, and that some of the trailers in question were never in Louisiana.
Bourget’s deal with FEMA aroused complaints among rival dealers who believed that the company got an unfair advantage on the deal through political connections.
Glen Smith’s nephew and Gary Smith’s son is Gary Smith Jr., a state representative from Norco who sits on the House Special Committee on Disaster Planning, Crisis Management, Recovery and Long-Term Revitalization.
Henry Smith, the company’s owners’ father, is the treasurer of the state Democratic Party.
Glen Smith said the company got the federal contracts because the company and its principals have been working in disaster recovery since the 1960s. He said the company got additional FEMA contracts after it successfully completed earlier ones.
Bourget’s won a civil lawsuit on that question from the 19th Judicial District Court in Baton Rouge in 2006. A state appeals court overturned the decision, but the company has applied for a rehearing. Smith said the company may appeal to the Supreme Court if it loses at the appeals court.