HLS 25RS-935 ORIGINAL
2025 Regular Session
HOUSE BILL NO. 366
BY REPRESENTATIVE DESHOTEL
TAX/AD VALOREM TAX: (Constitutional Amendment) Authorizes parishes to exempt
business inventory from ad valorem taxes and authorizes parishes to reduce the
percentage of fair market value applicable to business inventory
1 A JOINT RESOLUTION
2Proposing to amend Article VII, Section 18(A) and (B) and to add Article VII, Sections 20.1
3 and 20.2 of the Constitution of Louisiana, relative to ad valorem taxes; to provide for
4 the classification of certain property; to authorize the exemption of certain property
5 under certain circumstances; to authorize certain payments to certain parishes; to
6 provide for effectiveness; to provide for submission of the proposed amendment to
7 the electors; and to provide for related matters.
8 Section 1. Be it resolved by the Legislature of Louisiana, two-thirds of the members
9elected to each house concurring, that there shall be submitted to the electors of the state of
10Louisiana, for their approval or rejection in the manner provided by law, a proposal to
11amend Article VII, Section 18(A) and (B) and to add Article VII, Sections 20.1 and 20.2 of
12the Constitution of Louisiana, to read as follows:
13 §18. Ad Valorem Taxes
14 Section 18.(A) Assessments. Property subject to ad valorem taxation shall
15 be listed on the assessment rolls at its assessed valuation, which, except as provided
16 in Paragraphs (C), (F), and (G) this Section, shall be a percentage of its fair market
17 value. The percentage of fair market value shall be uniform throughout the state
18 upon the same class of property.
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HB NO. 366
1 (B) Classification. (1) The classifications of property subject to ad valorem
2 taxation and the percentage of fair market value applicable to each classification for
3 the purpose of determining assessed valuation are as follows:
4 Classifications Percentages
5 1.(a) Land 10%
6 2.(b) Improvements for residential purposes10%
7 3.(c) Electric cooperative properties, excluding land15%
8 4.(d) Public service properties, excluding land 25%
9 (e) Public Service property, excluding land, owned
10 by a railroad company 15%
11 (f) Business inventory 15%
12 5.(g) Other property 15%
13 (2) For purposes of ad valorem taxation, a parish may elect to reduce the
14 percentage of fair market value applicable to property considered business inventory,
15 as defined in law. The legislature may provide by law enacted by two-thirds of the
16 elected members of each house for the implementation of the provision of this
17 Subparagraph. Once enacted, any change to these laws shall also be enacted by
18 two-thirds of the elected members of each house of the legislature.
19 (3) The legislature may enact laws defining electric cooperative properties
20 and public service properties.
21 * * *
22 §20.1. Ad valorem tax; Business inventory tax exemption prohibition
23 Section 20.1. Notwithstanding any provision of this constitution to the
24 contrary, the legislature shall not enact any law mandating any taxing authority to
25 exempt business inventory from ad valorem tax. For purposes of this Section,
26 "business inventory" means the aggregate of those items of tangible personal
27 property that are held for sale in the ordinary course of business, are currently in the
28 process of production for subsequent sale, or are to physically become a part of the
29 production of such goods.
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HB NO. 366
1 §20.2. Ad Valorem Tax Exemption Funding
2 Section 20.2. The state may make a one-time payment to each parish that
3 elects to irrevocably exempt, in accordance with law, business inventory from ad
4 valorem tax. Any payment made pursuant to this Section shall be disbursed by the
5 treasurer to the tax collector of the parish. The tax collector shall distribute the
6 monies pro rata to each taxing authority that levies an ad valorem tax within the
7 parish. The amount of the payment shall be calculated as provided by law and
8 certified by the Department of Revenue. Notwithstanding any provision of this
9 constitution to the contrary, monies shall be disbursed by the treasurer to the
10 collector within thirty days of receipt of a certification from the secretary of the
11 Department of Revenue that the parish has irrevocably elected to exempt business
12 inventory from ad valorem tax.
13 Section 2. Be it further resolved that the provisions of the amendment contained in
14this Joint Resolution shall become effective on January 1, 2027, and shall be applicable to
15tax years beginning on or after January 1, 2027.
16 Section 3. Be it further resolved that this proposed amendment shall be submitted
17to the electors of the state of Louisiana at the statewide election to be held on November 3,
182026.
19 Section 4. Be it further resolved that on the official ballot to be used at the election,
20there shall be printed a proposition, upon which the electors of the state shall be permitted
21to vote YES or NO, to amend the Constitution of Louisiana, which proposition shall read as
22follows:
23 Do you support an amendment to authorize a parish to elect to exempt
24 business inventory from ad valorem taxes or to reduce the percentage of fair
25 market value applicable to business inventory? (Effective January 1, 2027)
26 (Amends Article VII, Section 18(A) and (B); Adds Article VII, Sections 20.1
27 and 20.2)
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HB NO. 366
DIGEST
The digest printed below was prepared by House Legislative Services. It constitutes no part
of the legislative instrument. The keyword, one-liner, abstract, and digest do not constitute
part of the law or proof or indicia of legislative intent. [R.S. 1:13(B) and 24:177(E)]
HB 366 Original 2025 Regular Session Deshotel
Abstract: Authorizes a parish to elect to exempt business inventory from ad valorem taxes;
authorizes parishes to reduce the percentage of fair market value applicable to
business inventory; prohibits the legislature from enacting a mandatory exemption
for business inventory; and authorizes the state to make a one-time payment to
parishes that elect to exempt business inventory from ad valorem taxes.
Present constitution requires all property subject to ad valorem tax to be listed on the parish
assessment rolls at its assessed valuation which is a percentage of the property's fair market
value. Present constitution requires the percentage of fair market value to be uniform
throughout the state on the same class of property and requires assessors to reappraise and
value property at intervals of not more than four years.
Present constitution provides for the different classifications of property which corresponds
with a percentage of fair market value applicable to each classification.
Proposed constitutional amendment retains present constitution with regards to the
assessment, listing of properties, and reappraisal of properties but changes the classifications
of property by adding a separate classification for business inventory and public service
property, excluding land owned by a railroad company.
Proposed constitutional amendment adds authorization for a parish to elect to reduce the
percentage of fair market value applicable to business inventory, as defined in present law.
Further provides that the legislature may provide for implementation of the optional
exemption for business inventory which law is required to be enacted by favorable vote of
two-thirds of the elected members of each house. Furthermore, once enacted, any change
to these laws will also require a favorable vote of two-thirds of the elected members of each
house of the legislature.
Proposed constitutional amendment prohibits the legislature from enacting a law requiring
a taxing authority to exempt business inventory from ad valorem tax.
Proposed constitutional amendment authorizes the state to make a one-time payment to each
parish that elects to irrevocably exempt business inventory from ad valorem tax. Further
provides for the process for making the payments and disbursing the monies to each parish
that elects to exempt business inventory.
Proposed constitutional amendment shall become effective on Jan. 1, 2027, and shall be
applicable to tax years beginning on or after Jan. 1, 2027.
Provides for submission of the proposed amendment to the voters at the statewide election
to be held November 3, 2026.
(Amends Art. VII, §18(A) and (B); Adds Art. VII, §§20.1 and 20.2)
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