Legislation to establish a flat corporate income tax of 5.5% [House Bill 2], along with a bill to allow parishes the option to collect corporate inventory tax [House Bill 7], both advanced from the House Ways & Means Committee. Supporters contend that the changes will attract new industry to the state. The latter bill states any parish that elects to exempt business from the business inventory tax will receive anywhere from $500,000 to $15 million from the state.
But State Representative Mandie Landry, D-New Orleans, has doubts. “Five regular sessions, this is going to create jobs and this is going to bring people here, and this is going to do this, that and the other, and I haven’t seen it. So how is this different? Have you researched it and not just look at North Carolina, which like I said took a decade. This is a hard sell.” Others have decried sales and use taxes as regressive because they take a higher percentage of income from low-income taxpayers than from high income taxpayers, as explained by the Internal Revenue Service (IRS).
But during the opening of this three week special session, Governor Jeff Landry spelled out why reform now is so important. “This tax code is bloated. This tax code is broken. This tax code is incredibly out-of-date. And this tax code is holding our state back.”
As Joe Gallinaro with the Louisiana Radio Network reports, Landry contends that his tax reform plans would produce the biggest tax cut in Louisiana history and would be lowered for most workers. “Taxing labor is wrong. Taxing labor is unfair. Taxing labor is economically debilitating, because God is the creator of our labor.”
On Monday, members of the Louisiana House Ways & Means Committee heard testimony from Secretary Richard Nelson and Assistant Secretary of the Department of Revenue Luke Morris, along with testimony from committee vice chairman Rep. Ken Brass, regarding House Bill 8. The legislation would levy sales and use taxes on digital media transactions. According to an assessment by the Legislative Fiscal Office (LFO), the proposed law would generate about $40,000,000 a year.
Legislation to place the current homestead exemption into statute also advanced.
