Louisiana lawmakers will return to Baton Rouge for a special session in November to consider a tax reform package pitched by Governor Jeff Landry. As expected, the plan calls for eliminating the personal and corporate income taxes, but it also calls for extending a sales tax already on the books.
"We are moving from taxing your labor to your choices," Governor Landry said. "I think that's fair."
Landry says his proposal will expand the sales tax base to include items not covered the under the current tax. Revenue Secretary Richard Nelson says he and the legislature are working through a list of those items to figure out what they'd include. Among those items: TV streaming services.
"A lot of these are luxury services," Nelson said. "These are things that we're choosing to buy. It's not things that you actually have to--car washes, for example."
Landry is also proposing a new tax aimed at one particular industry.
"To ensure that special interests pay their fair share, we're going to tax lobbying services," Landry said.
Landry says he also intends to hold lawmakers to "their promise" to "do away with the income tax." He says doing so will attract new residents to Louisiana and reverse the state's population decline. Landry also says his plan is designed to bring more jobs to the state.
"We will repeal the corporate franchise tax," Landry said. "We will drop the corporate tax rate from 7.5 percent to 3.5 percent. This is a dramatic improvement to bringing more jobs, greater prosperity, and a better economy to Louisiana. That's the kind of move that makes us competitive."
According to Nelson, the state stands to lose $500 million a year under this plan. That includes a $100 million shortfall in the state general fund.