Barfield says complicated tax system may scare away biz prospects

In Louisiana we pay about 7.8% of our income in state and local taxes, says Tim Barfield, executive counsel (and secretary-in-waiting) for the state Department of Revenue. That’s 47th-lowest in the nation—the national average is 9.9%—and two spots better than Texas. So why is Texas perceived as a lower-tax, business-friendlier state? In part, it’s because to get to the low rate in Louisiana, a business must navigate a complicated array of tax breaks and incentives. The Jindal administration is hoping a simpler system could raise the same amount of money while delivering a twofold benefit: letting business owners spend less time doing their taxes and more time doing something productive, and making it clear to business prospects that the tax burden here is relatively light. For example, some businesses may scratch Louisiana off the short list for a possible new location because they’ll have to pay an inventory tax, without realizing that the state essentially rebates 100% of the cost. Barfield spoke to the Rotary Club of Baton Rouge today. His boss, Gov. Bobby Jindal, has declared “revenue neutral” tax reform his top priority for 2013, although no specific proposals have yet been released. Meanwhile, the Legislature has been reviewing the state’s hundreds of rebates, credits and exemptions, with an eye toward eliminating some or creating new policies to govern them; read a Business Report story about that here. —David Jacobs