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Louisiana legislators convened Wednesday for a special session to consider a new tax code for the state that will make personal and corporate income taxes among the lowest in the nation. Gov. Jeff Landry says his plan—devised under the leadership of Louisiana Department of Revenue Secretary Richard Nelson—works toward a goal of eliminating Louisiana’s income tax by 2030, following similar moves in other conservative-led states. Many of the changes, including the additional personal income tax reduction, will require voter approval.
An overview
Out with the old: Louisiana’s current tax rate is 1.85% on the first $12,500 in income; 3.5% on income between $12,500 and $50,000; and 4.25% on everything $50,000 and above.
In with the new: Gov. Jeff Landry’s plan would simplify that structure to a 3% tax rate for everyone who makes more than $12,500.
For business: The proposed structure repeals the corporation franchise tax and institutes a flat corporate tax rate of 3.5% from the current 7.5% at the top level. It also makes the partial business utility exemption permanent.
The governor says
“We’re moving from taxing your labor to your choices.”
The newly taxed
With a reduction in income tax comes a new wave of sales taxes on everyday services, which the National Federation of Independent Businesses has said will create additional paperwork for small businesses and lead to higher prices that could affect sales. Some examples:
• Digital products, including online streaming services and subscriptions to genealogical, financial or other databases; computer software; and dating and social matching services
• Information services, including newsletter, tax guide, and research publications; financial or investment, circulation, credit, stock market, and bond rating reports; mailing lists; abstracts of title; scouting reports; surveys; bad check lists; and broadcast rating services
• Replacement or installation of a heating or air conditioning unit
• Interior decorating, design and remodeling services, including replacement or installation of roads, driveways, parking lots, patios, decks and sidewalks
• Private investigation, security, protection and bodyguard services
• Parking or storing motor vehicles and boats
• Professional laundry, cleaning, pressing, alterations, repair and dyeing services
• Car wash services
• Services including linen supply; mailing services; personal fitness training; grooming, boarding, and other pet care services; and photography and photographic studio services
• Lobbying and public opinion and research polling services
• Intrastate limousine, bus and van transportation, as well as taxi and ride-sharing services
• Landscaping, lawn care and horticultural services
• Social event planning and coordination and catering services; rental of space for meetings, conventions, weddings, banquets, parties and other short-term social events
