Louisiana Senate Bill SB122

Louisiana 2019 Regular Session

• Introduced: 3/27/19
• Refer: 3/27/19
• Refer: 4/8/19

Caption

Constitutional amendment to provide relative to ad valorem taxation on inventory. (2/3 - CA13s1(A)) (OR -$443,000,000 LF RV See Note)

Impact

If passed, SB122 would significantly impact state taxation policy by removing a layer of tax liability for businesses regarding their inventory. This is expected to enable businesses to reinvest saved funds into their operations, potentially leading to job creation and a flourishing entrepreneurial environment. By streamlining tax liabilities for local businesses, the bill aims to create a more business-friendly atmosphere that could attract new enterprises to the state.

Summary

Senate Bill 122, introduced by Senator Chabert, proposes a constitutional amendment that seeks to exempt inventory goods from ad valorem taxation in Louisiana. This bill aims to change Article VII of the Louisiana Constitution by adding a provision that specifically allows for the exemption of goods held in inventory from property taxes. The rationale behind this bill is to relieve local businesses from what can be seen as an economic burden due to inventory taxation, which may incentivize economic activities and assist in growing the local economy.

Sentiment

The sentiment surrounding SB122 appears to be generally positive among proponents, who argue that it will enhance the competitive edge of Louisiana businesses. Advocates contend that this constitutional amendment is a necessary step in modernizing the state's tax structure to support economic growth. However, concerns have been voiced by some critics who fear that this exemption might lead to a decrease in public revenue, particularly local funding that often relies on ad valorem taxes.

Contention

Notable points of contention include concerns regarding how the proposed tax exemption could impact local governments’ budgets and services that rely on property tax revenues. Critics argue that while the intention to support local businesses is commendable, the long-term effects could result in reduced funding for essential services funded by these taxes. The debate underscores a broader discussion around the balance between encouraging economic development and maintaining adequate public funding.