What’s left for the tax reform package?

The Louisiana Legislature approved a sweeping tax package last week aimed at overhauling the state’s tax system, pairing major income tax cuts with sales tax increases and the elimination of many tax breaks to balance the budget, The Center Square reports. 

On Friday, the Senate passed each bill by wide margins. Notably, the legislature combined two of the most important bills—House bills 1 and 10.

Per HB 10, the state sales tax rate increases from 4.45% to 5% beginning in January. The higher rate will remain in place for five years before dropping to 4.75% in 2029. The legislation is projected to reduce state revenue by $1.3 billion annually while raising $845 million through the higher sales taxes. 

Senate President Cameron Henry, R-Metairie, notes the additional 1% tax includes business tax breaks, meaning it will generate less revenue than initially estimated. The higher sales tax revenue is intended to offset the cost of reducing the individual income tax to a flat 3% rate.

The tax package now heads back to the desk of Gov. Landry.

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