The fate of Louisiana’s sales tax rate is up for debate once again. On May 22, the state legislature convened a second special session to address several concerns—chief among them, the June 30 sunset of its temporary 1 percent sales tax hike. If this increase, created in 2016 by Acts 25 and 26, is left to expire, the state is estimated to lose $1.4 billion worth of future revenue.
The legislation responsible for raising this rate also imposed temporary tax obligations on sales that had been traditionally exempt in the state, such as those made by nonprofits. These levies were coupled with a series of dates for which the 5 percent rate would be reduced and eventually eliminated. June 30 also happens to be the final phase-out date for most of these taxes.
During this second special session, Louisiana’s legislature is also wrestling with how to reduce the state’s overwhelming number of exemptions and exclusions. “Clean penny” advocates (subscription required) hold this particular issue paramount, pushing the removal of exemptions as a leading solution to the state’s budgetary woes.
Several attempts to resolve the matters of rate assignment and exemption clean-up have already failed. H.B. 11, which proposed to reduce the 1 percent increase to 0.5 percent, was unable to advance past committee last week. However, H.B. 27, which proposes to reduce the 1 percent hike to one-third of 1 percent, passed the House on May 28. Though this shows promise, passing another temporary extension scrapes at an even thornier battle, led by the governor, over permanently expanding the sales tax base to include more services.
It remains to be seen whether legislators can settle the sales tax issue by June 4 to avoid another special session.
Continue the discussion on Bloomberg Tax’s State Tax Group on LinkedIn: Do you think the Louisiana Legislature will be able to strike a deal?
Get a free trial to Bloomberg Tax: State, a comprehensive research service that provides deep analysis and time-saving practice tools to help practitioners make well-informed decisions.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)