The Louisiana Legislature kicked off the 2017 regular session on April 10, 2017, with an address by Governor John Bel Edwards. In his second state-of-the-state speech, the Governor reiterated his focus on resolving a $1.3 billion "fiscal cliff" next year when the temporary tax increases passed in 2016 are set to expire. The Governor presented his tax plan for the Legislature to consider, which included:
- Eliminating 1% of the state sales tax and expanding the remaining 4% state sales tax to new services and products not taxed today;
- Repealing the deduction for federal income tax on corporations and individuals accompanied by lower tax rates;
- Implementing a new Commercial Activity Tax (CAT) on the gross receipts of Louisiana businesses accompanied by a phase-out of the corporate franchise tax over 10 years.
On April 25, 2017, the House Ways and Means Committee defeated House Bill 628, by Representative Sam Jones, which was the instrument for the Governor's Commercial Activity Tax. Even after testimony from businesses across the state, the Governor continued to emphasize his belief that businesses in Louisiana are not paying their "fair share" and must be required to contribute more.
The administration does not intend to review the proposal to enact the CAT on the gross receipts of Louisiana businesses and is now looking for the House leadership to produce a solution. The House Ways and Means Committee will begin voting on other tax proposals the week of May 1, 2017.