Louisiana has the 9th worst business tax climate in the nation according to the Tax Foundation’s 2020 report.
Policy Analyst Janelle Cammenga says that’s largely due to having the 3rd highest sales tax in the nation, an above-average corporate tax rate, and decentralized sales tax collection.
“It actually allows every local jurisdiction to collect their own taxes, and it also allows everyone to determine their own rates and their own bases. That complication is a lot of what is happening to the score there,” says Cammenga.
Only Washington and Alabama rank worse in sales tax issues.
Cammenga adds another area where Louisiana is suffering is in it’s use of a franchise tax. She says it’s a tax that’s being phased out in most states.
“This is something that not a lot of states do, and it means they levy a tax on a company’s total net worth as opposed to just their income,” says Cammenga.
Cammenga says tax issues aren’t the biggest factor in where businesses chose to locate themselves, but they’re the factor easiest to change at a legislative level.
“While a state cannot necessarily change it’s physical landscape or the resources that might attract companies, every state can change it’s tax landscape and that is some change that they can make right now,” says Cammenga.
