(The Center Square) − Now that the House Ways and Means Committee has heard from the Louisiana Department of Revenue on the proposed tax reforms, the Legislature awaits Gov. Jeff Landry’s call for a special session to debate 10 bills which would make the most significant changes to tax policy in decades.
Landry’s proposals include a flat income tax rate of 3% for individuals and 3.5% for businesses, eliminating the corporate franchise tax and inventory tax, eliminating a slew of incentives and exemptions, and expanding the range of taxed goods and services.
A special session could convene for 10 days, a tall order for 500 pages worth of bills. As The Center Square recently reported, some wonder if this is enough time for lawmakers to really consider the implications of such monumental changes.
In Tuesday’s hearing Department of Revenue Secretary Richard Nelson said the state waited too long to find a more permanent and predictable tax form and “that’s why we’re contemplating doing it in a special session this year.”
One bill is a rewrite of article seven of Louisiana’s constitution, which would require a vote from Louisiana citizens.
Landry has not yet called a special session, though he announced plans in a news conference last week.
To raise any revenue will require a two-thirds majority vote in the Senate. While some bills may pass, there is no telling that all will.
The bills are also not finished products, so the Ways and Means committee may have to meet again to redraft and adjust.
The fiscal note is also not certain, meaning that the Department of Revenue does not know for certain what the bills will cost, how much tax revenue they will bring in and what they will cost taxpayers.
The DOR only has estimates of the fiscal note. With the new sales taxes, the DOR has no precedent to estimate what those newly-taxed goods and services will generate in revenue.
