United States: Louisiana Gallonage Tax On Dealers A Permissible Occupational License Tax

Joshua D Aubuchon is a SEnior Counsel in Holland & Knight's Tallahassee office

In Beer Industry League of La. v. City of New Orleans, No. 2018-CA-0280, 2018-CA-0285, 2018 WL 3216508 (La. June 27, 2018), the court held that a state gallonage tax levied on dealers who handled beverages with high-alcohol content was an "occupational license tax" authorized by the state constitution and, thus, a municipal ordinance authorizing a similar tax was also constitutional. The Beer Industry League of Louisiana (the Louisiana beer distributor's association) and the Louisiana Restaurant Association claimed that the City of New Orleans "exceeded its authority ... by imposing licensing fees and taxes upon the alcohol beverage industry in excess of the amounts allowed by law," and that the tax was "a direct tax on property in the control of whomever has possession of it and not an occupational license tax upon the activities of the dealer in handling the property." Although the tax was based upon gallonage, the court had previously reasoned that "the term occupational license tax consistently has been used to refer to any tax on the activity or privilege of conducting a business or practicing a profession." Because the tax imposed was on the entity selling the high-alcohol beverages for the privilege of selling those beverages and not upon the ownership of the product itself, the Louisiana Supreme Court held that the tax would indeed constitute an occupational license tax and was, therefore, a valid exercise of its authority to levy and collect taxes.

Regulation and Legislation

"80/20" Rule Under Scrutiny

DOL's so-called "80/20 rule" declares that tipped employees who spend more than 20 percent of their working hours on non-tipped duties cannot be paid the sub-minimum wage for those duties. Some states such as New York have implemented a similar or stricter regulation. Pending a ruling in Marsh v. J. Alexander's LLC, 882 F. 3d 777 (9th Cir. 2018) (en banc), which is reviewing a panel's ruling that the 80/20 rule is not entitled to deference because it has not gone through rulemaking, another lawsuit has been filed against DOL in the U.S. District Court for Western Texas, No. 1:18-cv-00567 that aims to stop DOL from enforcing the 80/20 rule. Meanwhile, two more district courts have denied defendants' requests for interlocutory appeal of plaintiffs' allegations that they required putative class members to spend more than 20 percent of their time performing non-tip-producing "side work" activities, meaning that the plaintiffs will still need to defend these claims. Alverson v. BL Rest. Operations, LLC, No. 5-16-cv-00849, 2018 WL 1618341 (W.D. Tex. April 3, 2018); Nelson v. Firebirds of Overland Park, LLC, No. 17-2237, 2018 WL 3818915 (D. Kan. Aug. 10, 2018).

Labeling of Food Sold in Glass-Front Vending Machines to Be Revised

The U.S. Food and Drug Administration (FDA) proposes to revise the type size labeling requirements for front of package calorie declarations for packaged food sold from glass-front vending machines. Comments on the proposed rule are due by Sept. 25, 2018.

Drive-By Lawsuits Lead to ADA Reform Proposals

H.R. 620 proposes to reform the Americans with Disabilities Act (ADA) to minimize so-called drive-by lawsuits by requiring a person asserting an ADA claim to give notice to the business specific enough to identify the barrier and allege that the owners or operators failed to remove or make substantial progress remediating the barrier. It passed the U.S. House of Representatives in February and is pending in the U.S. Senate. Similar bills are pending in some state legislatures such as in Texas (SB 827/HB 1463).

The Last (Plastic) Straw?

Efforts to minimize or prevent use of plastic straws and utensils are gaining momentum. For example, a measure that passed the California Assembly would prohibit restaurants from providing single-use plastic straws unless requested by a customer. In New York City, Mayor Bill de Blasio's administration strongly supports a bill that would ban plastic straws in the city. Many cities already ban plastic straws and/or utensils, such as Seattle, Wash.; Malibu, Calif.; Oakland, Calif.; Santa Barbara, Calif.; Fort Myers Beach, Fla.; and Delray Beach, Fla.

Dietary Fiber Expansion Proposed

The FDA recently issued guidance identifying additional isolated or synthetic non-digestible carbohydrates that it intends to propose, adding to the list of those that meet the regulatory definition of "dietary fiber" contained in 21 CFR §101.9(c)(6)(i).

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