Provides with respect to the exclusions and exemptions applicable to sales and use tax
Impact
If enacted, HB609 would impose a more structured approach to the application of sales and use taxes, resulting in some sectors experiencing a tax burden while offering relief to others. For example, it introduces a sales tax exemption for new trucks and cars kept as dealer inventory, as well as construction materials intended for charitable purposes. This could stimulate charitable work and local business sales for dealers while simultaneously making tax collection more efficient for the state.
Summary
House Bill 609 proposes significant modifications to the sales and use tax exemptions applicable in Louisiana. The bill aims to streamline and consolidate the numerous exemptions currently in place, by repealing many existing exclusions and replacing them with new consolidated exemptions. This includes provisions for sales of vehicles, telecommunications devices, and materials for charitable construction projects among others. The intent is to simplify the tax code surrounding these transactions and clarify which entities may benefit from exemptions.
Sentiment
The legislative discussion surrounding HB609 reflects a generally positive sentiment among supporters who argue that it reduces confusion in the tax code and supports both local businesses and charitable organizations. However, concerns have been raised by those aware of potential revenue losses from repealing certain exemptions, expressing apprehension over the long-term fiscal implications this may have on state funding for essential services.
Contention
Despite the benefits proposed, HB609 is not without its controversies. Opponents raise concerns about the elimination of specific exemptions that various sectors, notably education and small nonprofit organizations, currently rely on. The debate centers particularly around the impacts on these entities and whether the bill adequately addresses their needs while achieving the proposed simplification of the tax structure.
Removes the July 1, 2018, sunset date with respect to the applicability of certain exclusions and exemptions from state sales and use tax making the effectiveness of the exclusions and exemptions permanent (EG +$173,000,000 GF RV See Note)
Removes the July 1, 2018, sunset date with respect to the applicability of certain exclusions and exemptions from state sales and use tax making the effectiveness of the exclusions and exemptions permanent (Item #7) (OR +$154,300,000 GF RV See Note)
Provides relative to the base of the state sales and use tax and to provide for the applicability of certain exclusions and exemptions (Item #7) (OR +$143,000,000 GF RV See Note)
Provides with respect to the effectiveness of certain exclusions and exemptions from state sales and use taxes (Items #7-34) (EN DECREASE GF RV See Note)
Provides for the extent of applicability of various exclusions and exemptions from state sales and use tax (Item #36) (EG +$789,900,000 GF RV See Note)
To establish a framework upon which to repeal the property tax on business inventories and offshore vessels as well as the state income tax credits associated therewith through the repeal of a state sales and use tax, the levy of a limited, temporary state sales and use tax, and limitations on the applicability of certain exclusions and exemptions from certain state sales and use taxes (Items #31 and 36) (OR SEE FISC NOTE GF RV)
Dedicates the avails of the existing one percent state sales and use tax to the Stability in Higher Education Fund and provides with respect to the extent of that tax base for purposes of monies available for deposit into the fund (Items #7 and 36) (EG SEE FISC NOTE GF RV See Note)
Provides for the extent of applicability of various exclusions and exemptions from state sales and use tax (Item #36) (EG +$789,900,000 GF RV See Note)
Dedicates the avails of the existing one percent state sales and use tax for the support of public elementary through post-secondary education (EG +$231,000,000 GF RV See Note)