HIKE OR A CUT? Starting yesterday, people shopping in Louisiana started paying slightly less sales tax on their purchases, as the state sales tax rate dropped a little over half-a-penny that took effect with the start of the new fiscal year. The state sales tax had been scheduled to decrease from the 5 percent rate temporarily enacted in 2016 to 4 percent, but lawmakers in their latest special session renewed 0.45 percent of the expiring tax to avert steep cuts to higher education, healthcare and other government-financed programs.
With that legislative action, the sales tax rate is lowered to 4.45 percent instead, this rate is temporary and will expire in seven years. Renewal of part of the sales tax drew heated disagreement over three special sessions this year before lawmakers brokered the final deal a week ago. Conservative Republicans called the deal a tax hike, while Democratic Gov. John Bel Edwards called it a tax cut.
"But it is going to fund our most critical priorities in a responsible way and still give nearly $600 million dollars in tax reduction to the state of Louisiana," Edwards explained during a post-special session press conference on June 24, 2018.
In spite of the lower rate, Louisiana continues to still have the highest average state and local sales tax rate in the nation, with an average sales tax of 9.47 percent.
