Revisions to tax laws breezing through State House
BATON ROUGE — The House continued Wednesday to revamp the state tax system, passing bills to cut business tax rates, eliminate credits for movie-making and historic preservation and, for the first time, tax personal use digital music, video games, audiobooks and movies.
If the Senate agrees with the proposals, the corporate income tax rate would fall from a graduated system to a flat rate of 5.5 percent and then to 3.5 percent after 2026.
The House voted to tax a host of digital services as part of a major restructuring of the state’s revenue-raising laws.
The bill, which was introduced by state Rep. Ken Brass, D-Vacherie, was approved 80-19.
Brass noted that in the first year, the digital sales tax is estimated to generate about $22 million in state revenue. Afterward, he said the digital tax alone is forecast to produce $40 million a year.
Separately, the House Ways and Means Committee advanced a bill to reduce a 0.45 percent portion of the state sales tax to 0.4 percent.
That part of the sales tax is set to expire next year, but Gov. Jeff Landry is proposing to extend it permanently.
The committee also supported adding sales taxes on 41 services that are exempt now including car washes, Uber rides, pet grooming, dating services, tattooing, piercing and even tanning at a local Palm Beach Tan.
And the full House voted 79-19 to repeal income tax credits for certain film makers and for historic building preservation.
Lawmakers who had defended tax credits for film and historic preservation agreed to do away with them in favor of lower business tax rates.
“I’m pressing green on this bill because I have the commitment of the governor to make sure that program stays strong,” said state Rep. Michael Echols, R-Monroe, referring to the film industry.
The governor has said he would consider direct grants to filmmakers with approval of the Legislature.
Other House members scoffed at the film credit program which had a low return for the state, analysts said.
“It’s truly sad that we’re standing out here talking about these companies like they’re heroes,” said state Rep. Danny McCormick R-Oil City. “It's pure, 100 percent corporate welfare,” he said.
He said he preferred to give tax breaks to the working people of the state.
The House also took a first step in a multi-step process toward utilizing billions of dollars in the state’s Revenue Stabilization Fund to pay parishes that opt out of collecting the business inventory tax. This is estimated to initially cost around $218 million from the fund's resources.
The bill, authored by state Rep. Daryl Deshotel, R-Marksville, would remove the prior restrictions on the Revenue Stabilization Trust Fund and create a different revenue stabilization fund under the control of the Legislature that could appropriate funds when corporate income tax revenue falls below $800 million a year.
The Budget Stabilization Fund, commonly referred to as the rainy day fund, which holds the state's excess revenue from any source, would also rise under this bill. The current deposit cap of 4 percent of state revenue would increase to 7.5 percent of state revenue.
After utilizing the existing revenue fund to pay parishes for revenues they give up in tax collection, any remaining balance in the Revenue Stabilization Fund would be added to the Budget Stabilization Fund. In the end the state would effectively combine funds and place the resources under control of the Legislature and outside a cumbersome constitutional review process.
These bills passed in the House will now move to the Senate.
The House Ways and Means Committee also heard testimony on a proposal to raise taxes on electronic sports betting from 15 percent to 51 percent. After hearing from the industry, the author of the bill, state Rep. Roger Wilder, R-Denham Springs, said he would withdraw it and consider revisions.
The proposed changes to Louisiana’s tax system are heating up in the Legislature, with multiple bills still on the table.
The House still must agree on whether to tax the list of more than 40 services, revisit the gambling tax, clear pay raises for teachers and more.
Comentarios