State lawmakers returned to the Capitol today for their third legislative session―this one for tax reform.
Gov. Jeff Landry’s Louisiana Forward tax reform package includes 10 bills aimed at modernizing and simplifying Louisiana’s tax system while also spurring economic development.
Landry’s administration is proposing a flat 3% individual income tax rate with a standard deduction of $12,500. Currently, income up to $12,500 is taxed at 1.85%; income between $12,500 and $50,000 is taxed at 3.5%; and income above $50,000 is taxed at 4.25%. Landry and Department of Revenue Secretary Richard Nelson have expressed their desire to phase out the income tax entirely by 2030.
But within the package is a popular tax break program that’s on the chopping block.
The Louisiana Rehabilitation of Historic Structures Tax Credit Program reimburses property owners up to 25% of what they spend renovating a structure in a downtown development or cultural district and up to 35% in rural areas.
The state’s historic tax credits have been critical to helping revitalize downtown districts in cities.
Architect and developer Dyke Nelson says Louisiana is a leader in how the historic tax credits are used and many notable projects would not have come to fruition without the program.
“Louisiana leads the country in terms of their ability to renovate and put historic buildings back into commerce,” Nelson says. “The program is incentivizing developers to spend millions and billions of dollars to renovate buildings that otherwise wouldn’t be renovated, to put them back into commerce and make them a productive part of the communities that reside with them.”
The state’s program was created in 2002 and has been used to restore nearly 1,800 structures across the state, according to the Preservation Resource Center of New Orleans.
Nelson has used the program to develop several buildings in the Capital Region, including his office building on 14th Street, Electric Depot, 440 on Third, and the Tessier Building downtown.
“We have had some of the most wonderful successes in being able to keep these buildings in our communities that have 50, 100, 150 years worth of history that will otherwise just go away or sit abandoned for years and years,” Nelson says. “There’s a lot of opportunity to educate folks on how the program works and why it’s so important.”
The legislative session must conclude by 6 p.m. on Nov. 25.
Read how taxpayers might be affected by the tax reform package.
