Louisiana House Bill HB769

Louisiana 2012 Regular Session

• Introduced: 3/12/12
• Refer: 3/12/12

Caption

Excludes custom computer software from the definition of tangible personal property (OR DECREASE LF RV See Note)

Impact

The passage of HB769 will significantly affect tax revenues for local governments that currently rely on sales taxes from tangible personal property. By removing this category, the bill is expected to make Louisiana a more attractive environment for the software industry and related technological investments. Proponents highlight its potential to spur economic growth and innovation in the tech sector, while critics warn that local governments may lose critical revenue needed for community services.

Summary

House Bill 769 aims to exclude custom computer software from the definition of tangible personal property for the purposes of local sales and use taxes in Louisiana. The bill proposes to retain the current exemption of custom software from state sales and use taxes while eliminating the local option for a similar exemption. Essentially, no local government will be able to impose taxes on custom computer software as tangible property, which proponents argue could encourage businesses to invest in technology without the burden of local taxes.

Sentiment

Overall, the sentiment regarding HB769 is mixed. Supporters, including those in the technology sector, view it as a progressive step toward modernizing tax law and fostering a climate conducive to digital growth. Conversely, opponents express concerns about the loss of local control and revenue, emphasizing that local governments may struggle to fund essential services if they cannot tax software purchases.

Contention

The main point of contention exists around the bill's impact on local governance and funding. Critics contend that while the bill may benefit the tech sector, it undermines the autonomy of local governments to manage their own tax bases and prioritize local investment strategies. Questions were raised about how local services and infrastructure would be funded in light of this exemption, which could lead to greater financial disparity among municipalities.