The House has passed much of Governor Landry’s tax reform plan.
But one component of it is proving to be a hard sell in the house, and it could derail the whole thing.
The House did not vote on HB9 Monday, pushing it to Tuesday.
HB9 is the bill that would broaden the sales tax base to include 41 services not currently being taxed.
The vote was previously delayed last week when there was not enough support for it.
Pollster Bernie Pinsonat says taxing new services appears to be dead, so the House may be discussing a plan B, which would involve a previously-passed provision via HB10 to keep the sunsetting 0.45% sales tax increase and reducing it to 0.40%.
“There’s the possibility they may scrap that and go to a full penny,” says Pinsonat. “The rumor is they would raise a lot of new revenue with the one penny, which would replace the 0.45.”
Pinsonat says those proposing such a move are saying that people would actually come out even given the reduction of the state personal income tax, which has already passed the House and is being considered by the Senate.
“They’re saying that the new half-penny that’s being added would be offset by reducing people’s income tax,” Pinsonat says, “so they’re saying it’s a tax swap or a tax trade-off.”
Louisianians already pay some of the highest sales taxes in the country, and this move would make them even higher.
“It would move us to an (average) 11-cent sales tax,” says Pinsonat.
The eleven-cent sales tax is when you combine local sales taxes with a proposed five-cent sales tax.
The State Senate has begun considering the bills that made it through the House, but it could end up being moot if the House can’t approve a sales tax plan.
“Unless they can find another idea or another tax plan, certainly it would all be dead,” Pinsonat says.
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