It’s a done deal.
On Thursday, Gov. Landry signed the tax reform package passed by gthe legislature in the special session that wrapped up prior to Thanksgiving in a ceremony at the State Capitol.
Landry noted that passing the ambitious tax plan was a total team effort.
“Together, in a truly bipartisan manner, we passed an historic tax package that will absolutely — and already is — delivering wins for every person in the state and for our job creators,” said Landry. “It has been a long time since I’ve seen both chambers of this legislature work so closely together.”
Landry said the changes in the tax code mark a new day in Louisiana.
“To give the people of this state an economy that they can flourish in, that there are good paying jobs and that we lift everyone to a better tomorrow,” said Landry. “An era where every working citizen in this state gets to keep more of their hard-earned money. It’s an era that’s going to create a pro-business environment.”
One of the major highlights is changing the current tiered income tax system to a flat 3% across the board.
“We’re going to triple the standard deduction (to $12,500),” said Landry. “We’re going to fully eliminate the income tax for the working poor and put Louisiana on a path to eventually eliminating our income tax here in this state.”
The tax reform also includes the elimination of the corporate franchise tax.
However, there are a couple things that Landry asked for that he didn’t get.
Landry’s proposal called for the elimination of the film tax credit; the tax credit survived, but the cap dropped from $150 million to $125 million.
Also, lawmakers ultimately decided not to add most of the new services to the sales tax base that Landry had proposed.
Instead, to make up for the loss of tax revenue by lowering income taxes, lawmakers boosted the state sales tax rate to 5% for the next five years.
When combined with local sales taxes, Louisianians will be paying the highest sales taxes in the nation.
Landry noted that the ultimate goal is to spur business and industry and reverse the trend of the state losing population.
“For far too long, parents have watched kids leave this state for better opportunities,” Landry noted. “And we’ve watched businesses uproot themselves and supplant themselves in other states as well, and it’s frustrated us.”
Landry said by passing the tax reform package, the legislature changed Louisiana forever.
“I am confident that a decade from now, we will look back and say that this is the time in which Louisiana turned the page, and that is a whole new day here in Louisiana,” said Landry.
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