BATON ROUGE, La. (AP) – Talk of “tax reform” has returned to the Louisiana Capitol. Republican House and Senate leaders are making it their key push for the two-month legislature that begins Monday. But reform means different things to different people, and reaching an agreement is difficult at best.
Louisiana’s Republican majority legislature and Democratic Governor John Bel Edwards have been mired in tax debates for most of the past four years trying to fill massive budget gaps left by former Governor Bobby Jindal. Eventually they reached a patchwork deal to keep the state budget alive without profound cuts, which was largely offset by a temporary increase in state sales tax.
This deal fell far short of the long-term tax overhaul that good government groups, tax experts, and economists believe are necessary to simplify Louisiana’s exempted tax laws. Countless studies point to the problems.
A new term began in 2020 with new lawmakers, new GOP lawmakers in House Speaker Clay Schexnayder and Senate President Page Cortez, as well as new chairmen of the tax committee. You want to revisit the debate with an emphasis on business.
“Louisiana has a very competitive per capita tax burden for states and municipalities. However, due to the complexity of the current tax structure, we are ranked very low by many tax organizations, ”Cortez, Schexnayder and six other Republican lawmakers said in a joint statement outlining the effort. “Companies pay attention to these rankings.”
At least this time, lawmakers are not trying to rewrite the tax structure in the middle of a budget crisis. It is not clear whether this is a help or an obstacle. Sometimes Louisiana lawmakers only embrace profound change when their hands are forced by an impending disaster.
Temporary sales tax will expire in mid-2025, which might fuel the discussion but isn’t an imminent problem.
Edwards said he would support a tax overhaul if the package remains “revenue neutral” – where the treasury doesn’t lose the current money used to pay for government services.
“What I will not do as governor is create the structural deficit that I have inherited again. We worked too hard and made too much progress. I’m not going back to that, “he said.
Senator Bret Allain, the Franklin Republican who chairs the Senate Tax Committee, agrees. He said the goal is not to cut the tax revenue the state receives, but to make tax laws simpler, fairer and more attractive for businesses.
It will be difficult to reach an agreement on bills, two-thirds of which must be supported in the House of Representatives and the Senate. Legislators will face competing interests and would have to choose winners and losers. What advantages one company can harm another. What helps some households can increase the tax burden of others.
The top priority for the powerful Louisiana Association of Business and Industry – and Schexnayder – is to centralize sales tax collection across the state, rather than allowing local elected officials to oversee the work.
Proponents of centralization describe Louisiana’s fragmented approach as confusing and overly cumbersome for businesses. Some local government officials are sure they will resist efforts to evade their authority.
Other proposals put forward by Republican leaders would lower income and corporate tax rates to remove Louisiana’s current withholding tax on federal income taxes paid. They also want to cut corporate taxes and find a way to phase out the local property taxes that are levied on company inventory. How exactly they would make up for lost revenue is not clear.
Republican Senator Cameron Henry of Jefferson Parish is waiting for more details.
“I would envision that we would either meet in groups or get some guidance from the leadership about what the plan is and how it will affect the businesses and people in our districts. I hope I get that relatively soon, ”he said.
Baton Rouge MP Ted James, a Democrat who heads the Black Caucus Legislature, said the centralized sales tax proposal could win final approval. But he is skeptical that other major tax measures will emerge from the meeting.
“I know we are having these tax reform talks. We’ve done this before and they weren’t successful, “said James.” I don’t expect anything else. “
On a podcast with the Louisiana Association of Business and Industry, Allain admitted the difficulty of getting a passage: “You’re talking about displaced mountains that have been in this state for 30 and 40 years, but I think we will be taxable better state. “
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Editor’s Note: Melinda Deslatte has been reporting on Louisiana politics for The Associated Press since 2000. Follow her at http://twitter.com/melindadeslatte.