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$500,000,000 Tax Shift to Business is Not Tax Reform

Tags: tax swap, tax reform, jindal, barfield

HB 653 (Robideaux, Lafayette) would enact a new 6.25% tax on most business services.  This new 6.25% tax would generate about $1,500,000,000 in new state revenues, roughly 80% of which will be paid by businesses, according to the Louisiana Department of Revenue's information. 

When factored along with the other tax reform bills repealing personal income, corporate income, and the franchise tax, as well as other offsets including increasing the state sales tax rate from 4% to 6.25%, LDR officials warned that their “revenue neutral” tax reform will ultimately increase taxes on business by at least $500,000,000, based on fiscal year 2011 projections.

This tax shift to business is expected to increase substantially once the projections are carried forward to fiscal year 2015. 

This new tax burden on business will affect their ability to invest, expand, and create jobs.

LABI’s 2013 Program, approved by its members and directors, states that we will oppose any proposal that increases or has the effect of increasing the tax burden on business.

HB 653 attempts to tax all services in the state, except for certain listed exceptions.  

If passed, business services that will now be subject to the new 6.25% services tax generally include the following:

 

  • Accounting, tax preparation, bookkeeping, and payroll services
  • Architects and engineers
  • Computer programming
  • Manufacturing
  • Wholesaling
  • Retail trade
  • Insurance agencies and brokerage
  • Information services
  • Data processing
  • Management and consulting services
  • Professional, scientific and technical services
  • Scientific research and development services
  • Photography services
  • Veterinary services
  • All other miscellaneous professional services
  • Arts, entertainment, and recreation
  • Accommodation and food services
  • Employment services
  • Office administrative services
  • Business support services
  • Personal care services
  • Other personal services


For a complete list of these new taxable services, click HERE. The shaded items on the document are exempt services.

Please contact your legislator and tell them how this new 6.25% services tax will affect your business.