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Opinion: Amendment 4 wisely curbs Louisiana’s inventory tax
As I’m sure you know by now, Saturday is election day. Voters across the state will see several elections and items on their ballot, including five Constitutional Amendments.
LABI encourages a YES vote on Constitutional Amendment 4 because it gives local communities greater control over the inventory tax—one of the most unique and burdensome business taxes in the country. The amendment does not eliminate the tax statewide; instead, it allows local voters and local officials to decide whether reducing or phasing down the tax makes sense for their parish.
LABI believes this local-option approach helps Louisiana stay competitive for jobs and investment, supports small businesses that carry inventory, and empowers communities to make decisions based on their own economic needs. As noted in a new opinion piece from The Advocate:
“…the amendment has been thoughtfully crafted. A few heavily industrialized parishes rely on the inventory tax for a major part of their revenues, even as the tax seems a comparative pittance to the big national corporations operating there, some of them earning many millions or billions of dollars a year. That’s why, rather than eliminate the tax statewide, Amendment 4 instead lets each parish decide for itself where the best balance lies amidst the economic trade-offs involved.”
Oftentimes, opponents of CA 4 argue eliminating or reducing the inventory tax will hurt communities and benefit out-of-town companies. In reality, the tax as it currently stands puts our small businesses in the lurch when margins are already razor thin.
“Especially for small, low-margin retailers, the inventory tax is a major burden both financially and administratively. Furthermore, because it is levied according to raw inventory rather than as a percentage of net income, it is entirely possible for the tax to exceed the business’s actual profits. Businesses that lose money obviously can’t stay in business long.”