Kevin Boyd had a story earlier about the Senate Finance Committee’s hearing last night and its enthusiastic forwarding of the tax bills from the House’s tax orgy of last month.
One of those bills was HB 629 by Rep. Katrina Jackson, a 46-page monstrosity which actually INCREASES the state inventory tax from 20 percent to 28 percent and removes businesses’ ability to carry the credits forward to future years.
It gets worse. The bill also includes every business in Louisiana that has inventory rather than just businesses that pay the refundable portion of the state inventory tax as originally proposed. With this new language, this tax now hits every one of the more than 10,000 Louisiana businesses that pay the state’s inventory tax.
So anybody who houses inventory in Louisiana is going to be scrambling to put up warehouses and storage facilities in places like Waskom, Texas, Orange, Texas and Picayune, Mississippi – because it will save them a 28 percent inventory tax to do so. One might figure that smart entrepreneurs in those places will be hustling to erect such facilities and surge salesmen into Louisiana to generate business in what could well be a tremendous opportunity to quickly ramp up a customer base.
It’s a colossally stupid idea to raise the inventory tax in Louisiana at the same time the state is going to be eliminating the tax credit which goes along with it. As we’ve discussed before, the inventory tax as currently set up is nothing but a welfare subsidy for local governments with business as a middle man. Now it’s business which is going to provide the subsidy and not only is the state abandoning our job creators to the rapaciousness of police juries and parish councils but it’s magnifying the hit by raising the tax.
This is a bill which should have been laughed out of the committee. Instead, it passed overwhelmingly.
Here is the video of the portion of the hearing that LABI president Stephen Waguespack testified in opposition to the bill, complete with an attempt by Sen. Fred Mills to wipe out the tax – which failed, of course, with a slew of Republicans voting Mills’ amendment down.