The House Ways and Means Committee approves a proposal to begin phasing out a state temporary sales tax that’s set to expire in July of 2025. Prairieville Representative Tony Bacala’s bill would begin to phase out the .45-percent sales tax in July of 2023 to avoid a sudden drop in revenues.
“We are getting ready to hit a cliff and we can wait until the cliff is upon us and scramble to try and fix it or we can start to work on it today,” said Bacala.
The measure heads to the House floor for more discussion. The .45-percent state sales tax generates 420-million dollars in tax revenues a year and Bacala says the Legislature needs to begin planning for that loss of revenue.
“Those of who have been here for awhile that have gone through the fiscal cliffs and know the difficulty in fighting over TOPS gets cut or something else gets cut so all those things we need to talk about,” said Bacala.
Bacala’s bill would drop the temporary sales tax rate to .3-percent in July of 2023 and then .15-percent in July 2024. The tax would completely disappear in July of 2025.
New Orleans Representative Matthew Willard suggested having a discussion on expiring .45-percent sales tax next year when there’s a fiscal session, but Bacala says the sooner legislators address it, the better.
“It is an uncomfortable conversation, it’s going to be more uncomfortable the more we push it back, as hard it is to talk about this year, it’s going to be tougher next year and it’s going to be tougher the following year,” said Bacala.
The Ways and Means Committee approved a separate bill to take the money generated form this temporary sales tax and use it to pay for better roads and bridges until it expires in 2025.
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