For years, Louisiana has been mired in a tax system that discourages businesses from locating in our state. The Louisiana Legislature recently gave two-thirds approval, in both House and Senate, to two amendments that will position us for a brighter future. On the ballot this Saturday, November 13, 2021, you will have FOUR Constitutional Amendments. I would like to encourage you to vote FOR amendments 1 & 2.
Constitutional Amendment #1 Louisiana ranks 49th out of 50 states in terms of how we collect sales taxes. That’s because where almost every other state has just one collection agency, we have FIFTY-FOUR local tax collectors for our 64 parishes, and among them are more than 100 different local tax rates. In-state businesses required to charge local sales tax have to remit to these collectors separately, while out of state retailers have one simple portal. The current system is archaic and cumbersome, and puts our home-grown businesses at a serious disadvantage. Constitutional Amendment #1 would eliminate this cumbersome system and put our local businesses on equal footing with out-of-state competitors by creating a single commission made up of an equal mix of local and state government stake holders, people representing the State Associations of the LA Sheriffs, School Board, Police Jury, Municipal as well as the Governor, the Department of Revenue, State Senate President, and Speaker of the House of Representatives. This Commission will have the authority to streamline electronic filing, remittance and collection of sales taxes in an efficient manner, ensuring accuracy, transparency and accountability to both those paying local sales tax and the local governments who will receive the funds.
The streamlined solution is the product of months of collaboration between local sales tax collectors, business leaders and state policy experts, and was overwhelmingly passed by the State Legislature.
Constitutional Amendment #2 This amendment will simplify, at long last, our tax code. When economic developers work to recruit businesses to Louisiana, the most difficult sticking point in negotiations is our complex tax code. It’s a burden to business, and that means fewer jobs and less economic opportunity for Louisiana families. What’s more, one specific deduction – the “Federal Income Tax” deduction, throws uncertainty and unpredictability into our state budget process. If Congress lowers taxes, state revenues go up. If Congress raises taxes, state revenue goes down. That leaves funding for vital state services like Higher Education and Health Care in jeopardy. This amendment triggers a trio of companion bills that, together, create a simpler system with lower rates, helping Louisiana to recruit more jobs to our state. Specifically, the amendment and accompanying bills will cap personal income tax at 4.75%, which would be the lowest in the South and fourth lowest in the nation. It will remove current individual income tax brackets from the State Constitution, allowing the Legislature to lower rates. It will remove the “FIT” requirement from Louisiana’s Constitution. It will lower rates in the 3 brackets for personal income tax, lowering the highest from 6% to 4.25%. It will collapse corporate tax brackets from 5 to 3, capping the highest at 7.5%. Finally, it will eliminate the Corporate Franchise Tax on the first $300,000 of taxable capital, and lower the tax from $3 to $2.75 per thousand on capital greater than $300,000.
In an analysis of the plan, the Washington D.C. based “Tax Foundation” predicted that these tax reform measures will finally move Louisiana out of the bottom ten states in business tax climate rankings.
While nothing is perfect, these amendments will help Louisiana to attract the new businesses that are vital to the creation of jobs and economic opportunity for all of our citizens. I respectfully urge everyone to endorse that effort and vote FOR amendments 1 & 2 this Saturday, November 13th!!
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