Provides for suspension of certain tax exemptions during periods of financial exigency (Item #36) (OR SEE FISC NOTE GF RV)
Impact
The impact of HB 123 on state laws would be significant, as it effectively alters the rules surrounding tax exemptions and state revenue collection. By suspending these exemptions, the state aims to increase its revenue during financial crises, which could help in alleviating budget deficits. However, critics might argue that this could have a detrimental effect on businesses and individuals who rely on those exemptions for financial relief during tough economic times. This may lead to a decrease in consumer spending and a negative ripple effect on local economies.
Summary
House Bill 123 proposes the suspension of certain tax exemptions during periods of financial exigency. It defines 'financial exigency' as the time when the state operates under a budget deficit. The bill stipulates that the secretary of the Department of Revenue will suspend the affected tax exemptions, which include all state sales tax exemptions, refundable income tax credits, net operating loss deductions, and certain discounts for tobacco dealers and alcoholic beverages. This measure aims to provide the state with the ability to stabilize its revenue during financially challenging times.
Sentiment
The sentiment surrounding HB 123 is mixed. Supporters argue that the suspension of tax exemptions is a necessary step to ensure that the state can maintain essential services during times of financial strain. They believe that it will provide a financial cushion for the state. Opponents, however, raise concerns about the fairness of this suspension, fearing that it could lead to unintended consequences for businesses and taxpayers who depend on these exemptions. The debate reflects a struggle between fiscal responsibility and the safeguarding of economic relief measures.
Contention
Notable points of contention include the potential long-term effects on economic growth in Louisiana if the bill is implemented frequently during financial exigencies. Critics worry that continually suspending tax exemptions could disincentivize new investments and harm small businesses that rely on predictable tax policies. Additionally, there are concerns regarding the definition of 'financial exigency' and what criteria will trigger the suspension, as this could be subject to political interpretations and may vary over time, leading to uncertainty among taxpayers.
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)
Repeals three-year sunset of certain reductions to corporate income tax deductions, exemptions, and exclusions (Item #12) (RE1 SEE FISC NOTE GF RV See Note)
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)
Creates new $100 assessment for convictions of certain sexual offenses to fund counseling for victims and their families; establishes Sexual Offender Victim Counseling Fund.