Louisiana House Bill HB120

Louisiana 2016 1st Special Session

• Introduced: 2/23/16
• Refer: 2/23/16

Caption

Provides relative to the imposition of state sales tax on certain motor fuels (Items #9 and 36) (OR INCREASE GF RV See Note)

Impact

The legislation could significantly change the state's existing tax structure by broadening the base for sales tax on motor fuels. This is expected to increase state revenue and potentially stabilize or fund state programs reliant on tax income. By taxing these previously exempt sales, the state aims to address budgetary needs and enhance its fiscal capacity. However, this change also places a burden on consumers and businesses who may face higher costs at the pump, potentially affecting their spending and driving behaviors.

Summary

House Bill 120 seeks to impose a state sales tax on the sale of certain motor fuels, including gasoline, diesel fuels, and special fuels. Previously, these types of sales were excluded from state sales tax provisions; the passage of this bill would repeal that exclusion. Specifically, the measure would allow the state to levy a sales tax on these fuel sales, while also maintaining a ceiling that disallows taxation on sales prices above two dollars per gallon. The bill aims to generate additional state revenue by capturing tax from an area previously exempt from taxation.

Sentiment

The sentiment surrounding HB 120 is mixed, with proponents arguing that tax reforms are necessary for improving state revenue and maintaining public services. Advocates for the bill highlight the need for a more comprehensive tax base that includes fuel sales, which they believe will lead to longer-term fiscal health for the state. Conversely, detractors, including taxpayers and advocacy groups, express concerns that the bill could lead to increased costs for consumers, disproportionately affecting lower-income families and small businesses who rely heavily on fuel for their operational costs.

Contention

Key points of contention include the potential economic burden on consumers and the implications for businesses that depend on fuel. Critics argue that this new tax could lead to higher transportation costs, which could subsequently ripple through to goods and services affected by these transportation fees. In contrast, supporters contend that the fiscal benefits and enhanced funding for state services outweigh the accompanying burdens. The debate essentially hinges on the balance between necessary state revenue generation and the potential impact on citizens' financial well-being.