Louisiana House Bill HB27

Louisiana 2018 2nd Special Session

• Introduced: 5/23/18
• Refer: 5/23/18
• Report Pass: 5/24/18
• Engrossed: 5/28/18
• Report Pass: 5/31/18

Caption

Provides for the rate and base for state sales and use taxes (Item #22) (REC +$393,000,000 GF RV See Note)

Impact

The fiscal implications of HB 27 are substantial, as it seeks to amend existing laws relating to state sales and use taxes, directly influencing the revenue streams that support state programs and services. By changing the tax rate and extending the sunset, the bill addresses concerns from businesses about existing burdens associated with a higher tax rate. In light of this, proponents favor the tax reduction as a catalyst for economic growth, while critics express concerns over the long-term reliance on a temporary tax structure and the potential effects on public services depending on reduced tax revenue.

Summary

House Bill 27, also known as the 2018 Second Extraordinary Session proposed legislation, focuses on altering the state sales and use tax from a rate of 1% to 0.33% while extending the sunset date from June 30, 2018, to June 30, 2023. The changes aim to provide a more manageable tax burden on both businesses and consumers, as it reduces the tax level but retains a significant revenue base for state funding. This temporary adjustment in the tax rate is expected to have a critical impact on state revenue collection, which relies considerably on sales and use taxes.

Sentiment

The sentiment surrounding HB 27 appears mixed among lawmakers and stakeholders. Supporters have lauded the bill for reducing the tax burden during a period when many families and businesses are stretched financially. However, there is skepticism about the implications of a temporary tax structure, with some arguing that it could lead to instability in funding public services once the temporary tax expires. This dichotomy has fostered a debate about the balance between financial relief for citizens and dependable funding for government-run services.

Contention

Notable points of contention include the exclusions and exemptions applicable to the sales and use tax. The bill maintains certain exemptions for necessities like food and prescription drugs, which have been topics of significant debate. The contention lies in whether reducing the overall tax rate compensates for the potential loss of services funded by the revenue generated from the original tax structure. Stakeholders raise valid concerns about the bill's long-term viability and the adequacy of funding for essential services post-expiration of the temporary tax.