Louisiana House Bill HCR9

Louisiana 2015 Regular Session

• Introduced: 4/3/15
• Refer: 4/3/15
• Refer: 4/13/15
• Report Pass: 5/5/15

Caption

Suspends the state sales and use tax exemption for business utilities (EG +$103,000,000 GF RV See Note)

Impact

The resolution seeks to amend existing statutes related to exemptions from sales tax for business utilities, thereby extending the applicability of these taxes. By suspending exemptions, the bill could potentially increase state revenues significantly, with estimates suggesting a revenue gain of over $103 million for the General Fund. This move indicates a shift in state fiscal policy aimed at addressing budgetary shortfalls, and the funds generated are intended to support vital state services.

Summary

House Concurrent Resolution No. 9 (HCR9) aims to suspend the state sales and use tax exemption for business utilities in Louisiana, specifically affecting the tax levied on sales of steam, water, electric power, and natural gas. The suspension is proposed as a temporary measure lasting until sixty days after the final adjournment of the 2016 Regular Session of the Legislature. This action comes in response to the state's financial challenges, where the revenue lost from these exemptions is deemed critical for the continued provision of essential services to the citizens of Louisiana.

Sentiment

The sentiment around HCR9 is mixed, with discussions revealing concerns about balancing state revenue needs with the economic impact on businesses that rely on these exemptions. Proponents argue that the suspension is necessary given the state's financial difficulties and will help maintain critical services. However, business groups and some legislators express apprehension that imposing sales tax on utilities could lead to higher operational costs and disrupt business activities, raising questions about the long-term implications on economic growth and job retention.

Contention

The primary contention surrounding HCR9 revolves around the immediate financial benefits versus the potential negative repercussions for businesses. Critics argue that the bill could disproportionately burden industries that are already facing economic pressures, potentially leading to job losses or reduced investments in the state. Conversely, supporters emphasize the necessity of addressing the state's fiscal challenges and view the temporary suspension of exemptions as a pragmatic solution to ensure the continuity of state-funded services.