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LA’s Fiscal Session: What might we expect in a tax package?

As the April 12th opening of the 2021 Fiscal Session approaches, our team is working to keep you up-to-date with proposed legislation as it continues to develop. Our team will provide a clear understanding to keep our readers in the know and ahead of the curve.

Citing this article by Jeremy Alford of The Baton Rouge Business Report,read below for a brief overview of potential tax proposals and descriptions of its five "planks."

"Senate Revenue and Fiscal Affairs Chairman Bret Allain and House Ways and Means Chairman Stuart Bishop said in separate interviews last week that they will co-author a package of tax bills during the spring regular session.

The Republican chairmen have invited several stakeholders into the drafting process, including national voices like the Tax Foundation and the Council on State Taxation. Regarding the latter, Allain and Bishop say they’re largely driven by the goal of bettering the state’s standings in tax-related rankings, which would in turn make Louisiana more attractive to investors and businesses looking to relocate.

"Simplicity and predictability," Allain says. "That’s the goal."

The plan is an ambitious one, especially as lawmakers take up other challenging issues like the budget, unemployment and the coronavirus. But legislators rightfully feel like they should swing for the fences this spring. They may not get another shot."

Plank #1

Personal and Corporate Income Taxes:

"Our goal is to lower the rate as much as we can and add stability," Allain says. "For me, this is the top issue in the tax package."

Plank #2

Inventory Tax Credit:

While local governments have long opposed any changes to the inventory tax credit, many lawmakers want to reform the convoluted system that necessitates such a credit without impacting local coffers. At the same time, many local officials would like to see the governor’s executive order on industrial tax exemptions made permanent. "Maybe we can come together and marry those issues," Allain says, "where everyone gets what they want."

Plank #3

Franchise Tax:

"We’re taking a look at how we can phase out and replace it," Bishop says. "The idea of us taxing people on the amount of capital in this state isn’t doing us any favors."

Plank #4

Tax Administration:

This category has bills that will probably be the easiest for the chairmen to pass. For example, they want the state aligned with the new IRS partnership audit provisions and they’re exploring different options for people who work in Louisiana on a temporary basis.

Plank #5

Severance Taxes:

This conversation with the oil and gas industry began in earnest this week when Allain and Bishop asked representatives to help them come up with a compromise to make severance taxes, and other elements of tax law, fair to both industry and the state.

Southern Strategy Group will provide developments of this tax package as well as further information on bills that may pique your interest.

Share this newsletter with those who may benefit from it, and make sure to subscribe to receive daily news briefings and further updates as the spring session approaches.

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