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Louisiana lawmakers to approve sales tax increase to lower income, corporate tax rates

Louisiana lawmakers are in a special session to simplify the state's tax code.
Brooke Thorington
/
WRKF
Louisiana lawmakers are in a special session to simplify the state's tax code.

The special session on tax reform is expected to wrap up Friday after lengthy negotiations over the last two weeks.

Gov. Jeff Landry said the goal is to make Louisiana a more attractive place to do business and lower personal and corporate income tax rates. But Jan Moller with Invest Louisiana, an advocacy group to advance economic prosperity for all Louisianans, isn’t convinced.

“Even though Louisiana might look a little better on a conservative think tank’s business ranking, it’s probably not going to do what the governor and his allies say it is and bring a whole lot of new business to Louisiana,” said Moller.

The session was delayed because the Senate is combining two House Bills, HB 1 and HB 10 to lower the personal income tax rate to a flat 3% and raise the state sales tax to 5%. That combined with local taxes will add 10.6% to the cost of good. The graduated corporate franchise tax will also be repealed.

Moller said it’s concerning because the state’s sales tax rate, which is already the highest in the country, will be even higher.

“And even after you trade higher sales taxes for lower income and corporate taxes, we would still end up with a budget shortfall,” said Moller.

He said businesses also look at the cost of living, the quality of schools, and crime rates, and that the proposed changes “are going to make our tax system even more imbalanced.”

Inflation played a major role in the presidential election, and Moller said it appeared lawmakers were completely ignoring the fact that increasing Louisina’s sales tax will make it harder for residents to make ends meet.

The legislation must receive a two-thirds majority vote in both chambers and be approved by voters in March.

Before joining WRKF as the Capitol Access reporter, Brooke was the Assistant News Director at Louisiana Radio Network, where she also reported on statewide news and covered the state legislature.

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