Louisiana business lobbying groups are calling a centerpiece of Gov. Bobby Jindal’s budget proposal for next year a multimillion-dollar tax hike on business.
Jindal wants to lessen spending on refundable tax credits, in which the state pays out more than the taxes owed. He proposes to use the savings for public colleges and health care services. Business organizations are objecting to the most expensive tax break targeted for scale-back: the inventory tax credit, which refunds businesses for paying local property taxes on their inventory. Jindal wants to trim it by about $377 million.
The Associated Press reports the National Federation of Independent Business outlined its criticism today, along with the Louisiana Oil and Gas Association. The opposition is shared by the Louisiana Association of Business and Industry, run by Jindal’s former chief of staff, Stephen Waguespack. In an editorial on the LABI website, Waguespack suggests repeal of the inventory tax altogether would be a better move.
“We could actually repeal the inventory tax itself, which would make the credit no longer necessary and the state would save $462 million (using FY 14 numbers). This type of approach would make us much more economically competitive as a state and save Louisiana hundreds of millions of dollars to invest in higher education and health care each year,” he says. “However, simply repealing the credit and leaving this burdensome tax in place would do the opposite. It would drive us down the rankings of business-friendly states, throw sand in the gears of our growing economy, incentivize employers to send their investment and inventory out of state thereby diminishing local collections, and lower the number of jobs in Louisiana.”
