11.6.24 – Business Report –
As the state faces an estimated budget hole of more than $700 million next year―largely due to the expiration of a temporary .45% sales tax and a tax on business utilities―Gov. Jeff Landry is urging the GOP-dominated Legislature to overhaul the state’s tax structure.
His reforms call for retaining this sales tax and allowing the business utilities tax to expire. But he is pushing for far more sweeping constitutional amendments that would require voter support in statewide elections scheduled for March.
Among the governor’s proposals at the special session that began Wednesday is the flattening of income and corporate tax rates. To offset those revenue losses, Landry is proposing extending the sales tax to other services and digital goods, such as Netflix, lobbying, dog grooming and car washes.
Landry also seeks to merge two state trust funds holding nearly $3.8 billion dollars combined. Less money would be channeled to the state’s savings account under this proposal and more money from corporate tax and mineral revenue would be at the disposal of lawmakers to spend, according to an analysis from the Public Affairs Research Council, a nonpartisan Louisiana think tank.
Additionally, there are plans to remove dozens of tax breaks, including for the state’s film industry and for rehabilitating historic structures. Supporters believe the changes to corporate and income taxes will attract businesses and keep the state competitive with its neighbors as Louisiana battles outward migration.
Currently, there are 223 sales tax exemptions, Richard Nelson, Secretary of the Department of Revenue, said.
“I would say the tax code is one of the major drivers of why Louisiana fails to get ahead,” Nelson said at an Aug. 30 panel on the tax reforms.