| LaPolitics
Senate Chairman of Income and Taxes Bret Allain and House Ways and Means Chairman Stuart Bishop said in separate interviews last week that they will co-draft a package of tax bills during the regular spring session.
The two men who oversee the Louisiana Legislature’s tax writing committees have been working on some sections of the plan for a year, going back to informal meetings they held in the early months of 2020. But only recently have they started the process of merging their individual efforts.
The tax package will be put up for discussion at the regular meeting on April 12th. Since it is an odd year, the regular meeting is tax in nature so tax bills can be submitted and approved.
The Republican Chairs have invited several stakeholders into the draft process, including national voices such as the Tax Foundation and the State Tax Council. Regarding the latter, Allain and Bishop said they are largely driven by the goal of improving the state’s position in tax rankings, which in turn would make Louisiana more attractive to investors and businesses looking to move.
“Simplicity and predictability,” said Allain, a Franklin legislature whose district includes parts of Terrebonne and Lafourche. “That is the goal.”
Major bills are drafted collectively, with Bishop directing bills that must start on the side of the House and Allain directing bills that can be submitted to the Senate. To the extent permitted, some of the invoices will also be linked to one another.
Senate President Page Cortez, R-Lafayette, told LaPolitics last week that he hoped the package would be revenue neutral. Allain agreed, adding, “As much as possible. Obviously, we don’t want to draw up a tax return that we have to defend. ”
Bishop, also from Lafayette, also wants a revenue-neutral package, and he said a review is coming soon. “The House has already drafted and sent bills and we are waiting for tax receipts to see exactly what the package does,” said Bishop.
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While bills and other details were not yet available for publication, the package has five planks, according to the chairmen:
1. Income and corporate taxes: “Our goal is to bring the rate down as much as possible and create stability,” said Allain. “For me this is the main topic in the tax package.”
2. Inventory tax credit: While local governments have long been opposed to changes to inventory tax credits, many lawmakers want to reform the convoluted system that requires such a credit without affecting local coffers. At the same time, many local officials want the governor’s decree on business tax exemption to become permanent. “Maybe we can get together and marry these subjects,” said Allain, “where everyone gets what they want.”
3. Franchise tax: “We’re looking at how we can phase it out and replace it,” said Bishop. “The idea that we are taxing people on the amount of capital in this state is doing us a disservice.”
4. Tax administration: This category has bills that are probably the easiest for the chairperson to pass. For example, they want the state to align with the new regulations for reviewing IRS partnerships, and they are looking into several options for people temporarily working in Louisiana.
5. Severance payment taxes: That conversation with the oil and industrial industry started in earnest this week when Allain and Bishop asked representatives to help them find a compromise to make severance taxes and other elements of tax law fair for both industry and the state.
Bishop said he also plans to push ahead with a revamped centralized sales tax collection system as part of his own house package. This proposal is expected to be written by spokesman Clay Schexnayder. Allain said he supports the concept and expects Senate members to propose similar bills on the matter.
The plan is ambitious, especially as lawmakers are addressing other challenging issues such as the budget, unemployment and the coronavirus. But lawmakers rightly feel they should wave for the fences this spring. You may not get another shot.
The legislature’s next financial session will be in an election year of 2023, when the collective political will to make changes won’t be nearly as strong. Hence, many in orbit around the Capitol believe that this year will be the last opportunity lawmakers have that term for substantial tax reform.
I happen to believe that they are right. It is now or never for this state government term.
– Jeremy Alford is editor and editor of LaPolitics.com and LaPolitics Weekly. Email to JJA@LaPolitics.com.