Governor Jeff Landry’s tax reform plan is moving swiftly through the House seeing bipartisan reception reaching the Senate with minimal changes. Advantus Consulting Partner Jason DeCuir says key elements include eliminating certain sales tax exemptions, slightly lowering the sales tax rate, and adding new service taxes.
“They talked to most of the House members and for most part the package has stayed intact. I mean there’s been a couple nibbles here and there, and some small amendments, but nothing major.”
Currently, Louisiana taxes just eight services, mostly related to repairs of tangible goods, but the proposal would expand this to 41 services based on models from North Carolina and Texas. DeCuir says this expansion aims to reduce personal income taxes, though Jason notes it may raise consumer and business costs due to “pyramiding,” where taxes stack up through production stages.
“Then it makes the final thing that’s being delivered even more expensive because its been taxed multiple places along the way.”
DeCuir also addresses the corporate franchise tax and inventory tax credit. Eliminating the franchise tax would involve removing the inventory tax credit, sparking debate on how to balance parish-level property and sales tax revenues.
“You can see a significant burden to many business who operate in high inventory or have high inventory in certain parishes.”
Final Adjournment for the legislature is November 25.
