Business groups and the general public will weigh in today on Gov. John Bel Edwards’ main tax proposal—a commercial activity tax on gross receipts of businesses.
The Associated Press reports a hearing on the tax that began Monday in the House Ways and Means Committee will continue today. Republican lawmakers on the House tax committee panned the proposal, bolstering expectations the tax will be rejected amid concerns it would chase away economic development in Louisiana.
The concept of a tax on business sales—a gross receipts tax—was unveiled by the governor a month ago. The tax would raise an estimated $416 million a year in new revenue, to help offset expiring sales taxes. But there’s little public support for the proposal, even from the Democratic governor’s allies.
In questioning Monday, GOP lawmakers on the conservative, majority-Republican tax committee described their opposition.
“I just don’t see this as a fair tax, and I don’t see this as a way to promote business growth,” said Rep. Dodie Horton, R-Haughton. Rep. Barry Ivey, R-Baton Rouge, said it would add another layer of complexity to an already complicated tax system. And Rep. Jay Morris, R-Monroe, said past administrations may have been “a little too generous” to business in Louisiana’s tax structure.
But Morris added: “We don’t want to swing too far in the other direction, because jobs are critical and we do want to create an environment where we are welcoming.”
Edwards frames the tax as getting companies that use various loopholes to pay “their fair share.” He cites data that 80% of corporate income tax filers in Louisiana didn’t pay state income taxes in 2015.
