Friday, April 19, 2024

Louisiana House committee votes to raise bar for creating tax breaks

by BIZ Magazine

By David Jacobs | The Center Square

The Louisiana House’s tax policy committee voted unanimously Thursday to make it more difficult to enact and maintain state tax breaks.

Under House Bill 202 by Rep. Stuart Bishop, R-Lafayette, creating a new tax exemption, deduction, rebate or credit would require the support of at least two-thirds of the members in the House and Senate. Current law requires only a simple majority to enact new tax breaks, though eliminating one takes a two-thirds vote.

New exemptions also would expire after four years under Bishop’s proposal unless they are reauthorized. The change would require a state constitutional amendment, so at least two-thirds of the members in each chamber and a majority of voters would have to approve it.

Bishop described his bill as part of the larger effort to simplify the state’s exemption heavy tax code.

“This is just one piece of the puzzle in how we do tax reform,” Bishop said.

An official with the Washington-based Tax Foundation told a state task force that centralizing sales tax administration, which a bill the committee approved Tuesday seeks to do, would not by itself improve the state’s low score for an effective tax structure because it would not bring “uniformity and simplicity” to the system, said Karen White, the executive counsel for the Louisiana Municipal Association.

“This is what really moves that needle,” she said. “This is what gets us closer to being where I think the vision is for Louisiana with regard to tax policy.”

The House Ways and Means committee also advanced House Bill 514 by Rep. Tanner Magee, R-Houma. It would impose the state’s 4.45% sales tax on marijuana flower for medicinal use. Magee’s House Bill 391, which has not been heard in committee, would add the raw plant to the state’s medical cannabis program, which currently does not include smokeable marijuana.

Magee said state residents who use cannabis for therapeutic purposes want to be able to use the plant, which is cheaper than other forms and is available for medical users in neighboring states. Not allowing them to do so effectively could kill the state’s program, he said.

The proceeds would be dedicated to transportation construction.

Though a few members and one witness questioned whether cannabis as medicine should be taxed at all, the committee moved HB 514 without objection.

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