Beer Industry League of Louisiana and Wine and Spirits Foundation of Louisiana, Inc. v. the City of New Orleans and Norman S. Foster, in His Official Capacity as Chief Financial Officer and Director of Finance for the City of New Orleans, 251 So. 3d 380

Background

In Nov. 2016 New Orleans adopted Ord. No. 27179 revising municipal code §§10-501 and 10-511 to impose a gallonage (volume-based) tax on dealers who handle high‑alcohol beverages, effective Jan. 1, 2017.
Trade groups (Beer Industry League, Wine & Spirits Foundation, Louisiana Restaurant Association) sued seeking declaratory and injunctive relief, arguing the City exceeded its taxing authority; the trial court granted partial summary judgment declaring §10-501 unlawful and unconstitutional.
The plaintiffs argued the gallonage tax is not an "occupational license tax" authorized by La. Const. Art. VI, §28 and that state law (La. R.S. 26:491 and related provisions) precludes local taxes on alcoholic beverages except as expressly authorized.
The City argued the tax mirrors the state gallonage provisions in La. R.S. 26:341–342 (an "excise or license tax" on dealers), is an occupational/license tax allowed under Art. VI, §28 so long as it does not exceed the state rate, and that the municipal home‑rule charter supports its taxing power.
The trial court treated the gallonage tax as a direct/property tax (not an occupational tax), emphasizing liability can attach to any dealer in possession and that the state statutes’ wording and subsequent amendment removing the word "license" showed legislative intent.
The Louisiana Supreme Court reversed: it held the state gallonage tax—and the City’s corresponding gallonage measure—operationally function as occupational/excise/license taxes on the privilege of handling alcoholic beverages, so the City may impose a similar tax subject to the constitutional ceiling in Art. VI, §28; the case was remanded for further proceedings.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the City’s gallonage tax is an "occupational license tax" under La. Const. Art. VI, §28	The gallonage tax is a direct/property tax on beverages (collectable from possessor) and therefore not an occupational license tax permitted to be imposed by municipalities	The gallonage tax targets "dealers" and the act of handling alcohol (a business privilege), so it is an occupational/excise/license tax permitted by Art. VI, §28 if not exceeding the state rate	The Court held the state and municipal gallonage taxes are occupational/excise/license taxes on dealers (privilege of handling alcohol), so the City may impose a similar tax subject to Art. VI, §28 limits
Whether state law (La. R.S. 26:491 and related provisions) precludes the City from imposing a local gallonage tax	26:491 prevents municipalities from imposing taxes on alcoholic beverages except as expressly authorized by the Chapter; the City’s tax is therefore unauthorized	The state gallonage scheme itself is an occupational/license tax; exemptions in Title 47 do not bar occupational taxes enacted under Title 26; municipalities may adopt similar taxes under Art. VI, §28	The Court declined to treat 26:491 as defeating the constitutional grant allowing municipal occupational license taxes and relied on operational effect to classify the tax as an occupational/license tax
Whether the City’s home‑rule powers or Art. VI, §4 independently authorize the tax	Home‑rule cannot override constitutional limits and the legislature’s scheme	Home‑rule and Art. VI, §4 allow broad local taxing power unless inconsistent with the Constitution; Art. VI, §28 explicitly authorizes municipal occupational license taxes not greater than the state’s	The Court rejected the trial court’s reliance on home‑rule inconsistency and treated Art. VI, §28 as the controlling constitutional authorization for a municipal occupational tax tied to the state rate
Whether the trial court properly granted summary judgment declaring §10-501 unconstitutional	The trial court: gallonage tax is not an occupational/license tax; liability rules make it a property tax; thus ordinance invalid	City: statute’s incidents show an indirect tax on dealers’ privilege to handle alcohol; ordinance valid because it mirrors state law and is below state rates	The Supreme Court reversed the partial summary judgment and remanded; it found as a matter of law the gallonage tax is an occupational/excise/license tax and §10-501 is not unconstitutional on that basis

Key Cases Cited

Radiofone, Inc. v. City of New Orleans, 630 So.2d 694 (La. 1994) (defines occupational license tax as a tax on the activity or privilege of conducting business and treats gross-receipts based levies as occupational taxes)
Mire v. City of Lake Charles, 540 So.2d 950 (La. 1989) (occupation tax defined as an indirect excise on conducting a business or profession; distinguishes occupation tax from income/property taxes)
Lionel's Cigar Store v. McFarland, 111 So. 341 (La. 1927) (taxes described as "on" goods can be occupational/excise taxes when collected only from those engaged in the business of selling those goods)
Roberts v. City of Baton Rouge, 108 So.2d 111 (La. 1958) (explains that excise/license taxes operate on activities/privileges, not property, and broadly defines excise tax)
Reed v. City of New Orleans, 593 So.2d 368 (La. 1992) (nature of a tax determined by incidents and operational effect rather than label)