Louisiana House Bill HB559

Louisiana 2017 Regular Session

• Introduced: 3/31/17
• Refer: 3/31/17
• Refer: 4/10/17

Caption

Repeals the state sales and use tax exclusion for manufacturing machinery and equipment and the exemption for business utilities and provides a refund of the state sales and use tax collected on certain manufacturing machinery and equipment and industrial utilities (OR INCREASE GF RV See Note)

Impact

The proposed changes by HB 559 significantly impact existing state tax statutes regarding manufacturers. By eliminating the sales tax exemptions for machinery, equipment, and various utilities, the measure aims to create a more equitable tax system. However, it also introduces the opportunity for manufacturers to receive refunds on certain taxes paid for their operational needs. This dual approach is designed to alleviate the tax burden while also maintaining revenue collection integrity for the state.

Summary

House Bill 559 aims to repeal the state sales and use tax exclusion for manufacturing machinery and equipment, as well as the exemption for business utilities. It introduces a mechanism to provide refunds for the state sales and use tax collected on specific manufacturing machinery and equipment and certain industrial utilities. The key objective of this bill is to streamline the taxation process for manufacturers while ensuring that they are able to reclaim some of the taxes paid on essential resources necessary for their operations, thus intending to support the manufacturing sector in Louisiana.

Sentiment

Discussions surrounding HB 559 reveal a mixture of support and concern among legislators and stakeholders. Proponents argue that the bill will enhance the manufacturing sector's competitiveness and provide necessary relief through the refund mechanism. In contrast, critics highlight potential challenges in claiming refunds and express concern about the financial implications for local governments that may be affected by the repeal of sales tax exemptions, suggesting that the bill may not adequately consider all economic factors.

Contention

A major point of contention in the discussions of HB 559 relates to the perceived fairness of eliminating long-standing tax exemptions that have historically benefitted manufacturers. Some stakeholders fear that without adequate safeguards, the repeal could lead to unintended economic consequences for local businesses dependent on these exemptions. Additionally, the effectiveness of the refund process and the administrative burden it places on manufacturers seeking reimbursement is another area of contention, with calls for streamlined processes to ensure efficiency.