LABI members, 

I hope you all had a great Thanksgiving holiday with loved ones – reflecting on the many blessings of the past year. As always, but especially during the holiday season, we are thankful for your membership, participation, and support of the LABI team. Your involvement is what allows us to make a difference on behalf of the business community.

As many of you know, the Louisiana Legislature recently concluded a two-week Special Session called by the governor to simplify our tax structure and make Louisiana a more attractive state for our citizens to live and work and businesses to operate in. LABI staff was at the Capitol daily, having high-level conversations that spurred various compromises, helping to craft a business-friendly package that ultimately made it to Gov. Landry’s desk.

Restructuring Louisiana’s antiquated tax system was never going to be easy, but undertaking the exercise during a budget deficit makes it even more difficult. This makes the session’s outcome all the more remarkable. LABI commends Gov. Landry, Department of Revenue Secretary Richard Nelson and his staff, and the Legislature and its staff for their immense effort and significant accomplishments leading up to the Thanksgiving holiday.

As pointed out in our LA Driven Strategic plan, Louisiana had one of the least competitive tax codes in the country. The state’s fiscal framework relied heavily on a comparatively large number of taxes with multiple brackets and a myriad of high rates that exceed national averages. Major concepts underpinning the governor’s legislative package were recommendations within our LA Driven strategic plan for converting Louisiana into an effective economic competitor in the south, including:

• Repealing the corporate franchise tax,
• Flattening and eventually eliminating the individual income tax,
• Reducing the corporate income tax,
• Standardizing and reducing the severance tax,
• Phasing out the inventory tax, and
• Broadening and modernizing our state’s sales tax base to include digital goods.

While the session lasted a mere two weeks, the discussion surrounding these changes has been going on for years and LABI has been meeting with Secretary Nelson and his staff to discuss our respective visions for reforming Louisiana’s cumbersome and uncompetitive tax structure since his selection by the governor to his post back in January. These meetings continued throughout the year and into the Special Session.

As it became clear there would be a November Special Session, LABI arranged a tax policy forum for legislators that permitted them access to state and national experts for discussions on the elements of good state and local tax policy. The Secretary later met with LABI’s Board of Directors as well as our Taxation and Finance Council ahead of the session to outline his legislative proposals and receive feedback regarding them.

As stated above, most of Gov. Landry and Secretary Nelson’s package aligned with our LA Driven recommendations; however, around a dozen elements within the package were particularly problematic for our members. On your behalf, we engaged with the administration, Secretary Nelson, and legislative leadership throughout the process. We addressed the issues that presented the greatest difficulty for our members. While these solutions were not all that LABI members would have wished for, and some issues remain with the package as passed – as is always the case with legislation of this magnitude – LABI will continue to work with the administration to resolve them during the regular session next year.

While this message is quite lengthy, we believe it to be important to provide each of our members with a thorough rundown of what happened at the Capitol last month. Our team has compiled an overview of the package’s bills we tracked and managed throughout the session. To view the summaries, click here.

While it will take time to see the full effects of this legislative package, we do feel this is a step in the right direction towards improving Louisiana’s tax climate. However, our work is not done. LABI will continue our efforts, on your behalf, to remove additional harmful and uncompetitive taxes that make Louisiana an outlier.

As always, thank you for providing valuable insight and perspective that informed our work during this important stretch. If you have any additional questions, please do not hesitate to reach out.

The LABI team wishes you a safe and joyful holiday season!

Will Green
President & CEO