Here Are The Tax Bills That Have Been Filed For The Special Session

The 2016 Special Session kicked off yesterday with a speech by Governor Edwards himself. The lightweight in chief is asking for massive tax increases to close a nearly $900 million budget deficit for the end of the year.

The Republican-controlled House of Representatives decided to actually participate in this farce instead of refusing the call like they should have. They decided their per diems were more important than the economy of Louisiana.

Here are some of the tax bills that the Legislature is considering:

  • Three bills have been filed to raise cigarette taxes by 22 cents. HB 3, HB 14, and HB 15 all do the same thing. The Legislature is going to take one of them and it really doesn’t matter which one. Raising the cigarette tax is something that can certainly be justified on public health grounds, but ultimately it’s a poor source of revenue. As cigarette taxes go up, fewer people will smoke and that means less money for the state.
  • Two bills have been filed dealing with the Earned Income Tax Credit. Essentially if you qualify for the state EITC, it could eliminate your entire state tax burden and if there’s a difference you would be cut a check. It’s a welfare program administered through the tax code. HB 4 by State Rep. Tony Bacala (R-Prairieville) would repeal the EITC. HB 5 by State Rep. Walt Leger (D-New Orleans) on the other hand would increase it. In an ideal world, Bacala’s bill would be passed and enacted. However, my guess is the Legislature won’t move either bill.
  • State Rep. Steve Pugh (R-Ponchatoula) has filed HB 6 which requires those who have internet affiliate stores such as through Amazon and EBay to collect Louisiana sales tax if they make over $50,000 in sales. The fiscal note has already come out on the bill and it essentially says that it will cost the state money to implement it because of how the money is going to be doled out to local governments. I’ve been contacted all weekend by out of state organizations, there will be a fight on this bill. If the bill passes, it will likely be challenged in court. Pugh’s bill is badly written and should be rejected.
  • State Rep. Katrina Jackson (D-Bastrop) has filed HB 7 which excludes dividend income entirely from the corporate income tax. This is a sweetener to help pass some of the corporate tax increases that she’s filed including HB 25. Jackson has also filed some bills to permanately extend some tax credits.
  • State Rep. Ted James (D-Baton Rouge) filed HB 19 which expands the corporate franchise tax. Louisiana is one of the very few states that still has one combined with a corporate income tax.
  • State Rep. Walt Leger (D-New Orleans) also has a bill, HB 30, to tax internet and catalog sales as well. It does the same thing as Pugh’s bill but is much better written. It will still face legal challenges as well.
  • Two Constitutional amendments have been filed, HB 8 and HB 31 which eliminate the state income deduction for Federal income taxes paid. I don’t have much of a problem with this, but I’m not sure these should be considered in this session.
  • Both Leger and State Rep. Neil Abramson (D-New Orleans) have competiting income tax reform proposals, HB 32 and HB 48. Leger’s HB 32 merely reduces rates while Abramson’s HB 48 reduces rates, but expands income thresholds for each bracket and reduces tax deductions.
  • State Rep. Julie Stokes (R-Kenner) has HB 39 which creates a tax on car rentals. It remains to be seen if the tourism industry will fight it or not.
  • State Rep. Jay Morris (R-Monroe) has HB 36 which lowers corporate income taxes. Morris has actually filed a couple of other good bills this session. He has HB 42 which seeks to rein in state consulting contracts and HB 45 which whacks a bunch of statutory dedications.
  • Abramson has filed HB 50 which phases out the corporate franchise tax and creates a flat 5% corporate income tax. It’s the better corporate tax reform of the two filed so far.
  • State Rep. Kenny Cox (D-Nachitoches) has HB 27 which would raise the excise taxes on alcohol. Essentially, a bottle of whiskey would cost about 19 cents more and a bottle of wine would cost about 16 cents more.
  • Bacala has filed HB 37 which accelerates the end of the solar tax credit program. I’m starting to like this guy.
  • Finally, a bunch of state reps have filed bills to get rid of the SAVE Act that was passed last year at former Governor Bobby Jindal’s request.

To sum up, we have some obvious money grabs that have been filed on the usual suspects, businesses and smokers. This time the legislature is also going to try to hit tourists and booze drinkers as well. But there are some worthy proposals for tax reform that have been filed as well.

It’s also telling that no one is carrying John Bel’s “clean penny” sales tax increase. I guess they realized the polling on that issue wasn’t very good.

We have a lightweight in chief who isn’t much of a leader, so the Legislature is going to have to step up this session.

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