Governor Jeff Landry’s tax reform special session gets underway today at the state capitol at three PM. The governor wants to establish a flat state income tax of three percent, which will result in lower state income taxes for most Louisianans.
Revenue Secretary Richard Nelson says to make up for some of that lost tax revenue, the state would broaden the state sales tax.
“Want to broaden the base of the sales tax, really modernize it, to capture some things we are not doing right now, we want to simplify the sales tax code by getting rid of a lot of exemptions, we have almost 225 sales tax exemptions, we would like to wipe out a lot of those,” Nelson said.
Nelson says services that are currently not taxed would be taxed. For example dog grooming, landscaping, and storage services. Nelson says this much needed tax reform would put more money in people’s pockets and make the state more competitive in attracting businesses.
“A lot of people see the benefit of having those lower income tax rate as making the state more competitive and benefiting them personally so I think there is a pretty significant benefit to everybody,” Nelson said.
Critics of the plan are concerned the governor’s tax plan will lead to higher taxes for low-income residents and a big tax cut for the wealthy.
Nelson says they also want to eliminate the tax on prescription drugs. He says Louisiana is one of a few states that have a tax on prescription drugs.
“Trade off for that is that we’re basically tax car washes and dog grooming, I think people would rather pay tax on their car washes and dog grooming versus their medicine,” Nelson said.
The special session must end on Monday November 25th.
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