The Tax Foundation releases data on what each state imposes when it comes to state and local sales taxes, and Louisiana leads the nation with a rate of 9.98-percent. Vice President for State Projects Joe Henchman says having a high rate is okay for states if it’s managed well and residents can afford it. But he says that’s not the case in Louisiana.
“There is a lot of criticism, not just of how high the rate is but also how it’s structured. Very complex structure on the sales tax in Louisiana. Different rules for the state and local and a lot of complexity.”
Louisiana is facing a 304 million dollar budget deficit and Henchman says the Tax Foundation has recommendations for state lawmakers to fix problems with its tax system. He says the rate is so high because what the tax applies to is so narrow…
“And if you’re able to broaden the base, take out some of those carve outs and exemptions that have worked their way into the code, you might be able to not only generate some revenue but also be able to lower the rate on everything else.”
Tennessee, Arkansas, Alabama and Washington are ranked behind Louisiana in the top five. Henchman says Louisiana certainly deserves its number one ranking.
“Louisiana is in a category all to itself in terms of complexity and high rates, especially on its sales tax and almost any change would be an improvement at this point.”