Yesterday evening, Louisiana legislators passed a large set of tax-related bills as a part of the state’s overall budget package. Louisiana has had an interesting legislative session. The budget shortfall was $1.6 billion, and statutory dedications in the state make it very difficult to cut spending in programs other than higher education and health care.
Another important wrinkle is that Governor Jindal, a presidential hopeful, is an Americans for TaxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. Reform (ATR) Taxpayer Protection Pledge signer and has vowed to veto any revenue raisers that are not offset with revenue reductions.
In the session’s final days, this resulted in the creation of an elaborate budgetary maneuver called the SAVE program (“Student Assessment for a Valuable Education”) that creates a fee for college students—which is neutral with respect to the Taxpayer Protection Pledge—and then gives the students back that fee in the form of a tax credit—which counts as a revenue reduction under the Taxpayer Protection Pledge.
To be fair, Americans for Tax Reform does not appear to be the fountainhead of this maneuver. In a letter to Representative Joel Robideaux, who chairs the Louisiana Ways and Means CommitteeThe Committee on Ways and Means, more commonly referred to as the House Ways and Means Committee, is one of 29 U.S. House of Representative committees and is the chief tax-writing committee in the U.S. The House Ways and Means Committee has jurisdiction over all bills relating to taxes and other revenue generation, as well as spending programs like Social Security, Medicare, and unemployment insurance, among others. , ATR president Grover Norquist wrote, “ATR does not support or oppose the SAVE Act. […] ATR is agnostic as to whether a credit or deduction is good policy. We merely call balls and strikes regarding whether a change in tax law results in a net tax increase.”
Regardless, the situation is generally seen as less than ideal. The nonpartisan Public Affairs Research Council of Louisiana (PAR) called the budget a “real piece of work,” describing the SAVE program as a “Rube Goldberg budgetary contraption.”
The New Orleans Advocate reported late last night that the Governor has said he’ll sign the tax measures in addition to the final budget. The table below lists all of the tax-related bills, in addition to additional resources for each. Click on bill number for legislative history. (Many thanks to the Associated Press for posting all of the bill numbers in one place.)
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Bill No. |
Description |
Additional Notes |
|---|---|---|
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SAVE Act. Creates student fee and offsetting tax credit. |
Final Conference Committee digest here. |
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Increases cigarette tax by 50 cents per pack and imposes a tax on e-cigarettes and vapor products. |
Final Conference Committee digest here. |
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Excludes retail, accommodations, and food services businesses from participating in Enterprise Zone tax credit program. |
Final bill here. Fiscal note here. Info on Enterprise Zone program here. |
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Changes certain definitions and provisions under the film tax credit program and caps the total amount of annual credits that can be claimed annually at $180 million. |
Final Conference Committee digest here. |
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Temporary suspension of the business utilities sales tax. |
Final Conference Committee digest here. |
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Changes severance tax exemption for horizontally drilled wells. |
Final bill here. House summary of final bill passed by Senate here. |
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Requires certain remote sellers to collect 4 percent state sales tax (“affiliate nexus”). |
Final bill here. House summary of final bill passed by Senate here. |
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Reduces the amount businesses can receive back from the state via a credit for local inventory taxes paid (changes credit from fully refundable to only 75 percent of the amount that income or corporate franchise tax liability exceeds inventory taxes paid). The remaining 25 percent can be carried forward “against subsequent income or corporation franchise tax liability for up to five years.” |
Final Conference Committee digest here. |
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Limits solar tax credit. |
Final bill here. Fiscal note here. House summary of final bill passed by Senate here. |
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Changes Net Operating Loss (NOL) carryforward from 15 years to 20 years and repeals NOL carryback (formerly was 3 years). |
Final Conference Committee digest here. |
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Temporarily reduces the amount of certain tax credits (each reduced by 28 percent; see link at right for details of each). |
Final Conference Committee digest here. |
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Temporarily reduces the amount of certain tax deductions and exclusions (each reduced by 28 percent; see link at right for details of each). |
Final Conference Committee Digest here. |
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Temporarily reduces the amount of certain tax rebates (see link at right for details of each). |
Final Conference Committee Digest here. |
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Changes tax credit for income taxes paid to other states. |
Final Conference Committee Digest here. |
More on Louisiana here. Follow Liz and Scott on Twitter @elizabeth_malm and @ScottDrenkard.
P.S.- We are currently in the research phase of producing a recommendations book in Louisiana similar to our popular North Carolina, Nebraska, and Nevada projects. Look for a lot more analysis from our team in the coming months.
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