Louisiana voters on May 16 will decide whether to give parishes the option to reduce or eliminate property taxes on business inventory, taxes that business leaders have long criticized as hindering the state’s economic competitiveness.
But even if Constitutional Amendment No. 4 passes, a key question remains: How many parishes would actually take advantage of that option?
Sanders Colbert, a tax attorney with Stone Pigman, tells Daily Report that adoption would likely be far from universal.
“I’m sort of doubtful that this will see broad-spectrum adoption,” Colbert says.
If approved, Amendment No. 4 would give local governments—specifically parish governing authorities, school boards and sheriffs—the ability to jointly decide whether to reduce or fully exempt inventory from property taxes.
Parishes that opt to eliminate the tax by July 2027 would receive a one-time payment from the state ranging from $500,000 to $15 million, calculated based on their 2026 inventory tax collections. Alternatively, they could opt to phase out the tax over five years and receive a smaller incentive. Any decision to reduce or eliminate the tax would be permanent.
Colbert expects the amendment, if passed, to create a patchwork outcome.
Smaller, more rural parishes would be more likely to opt out of the tax in hopes of attracting new investment, he says. The upside of landing a major facility could outweigh the relatively small amount of inventory tax revenue such parishes currently collect.
“If a business dangles a carrot in front of a parish saying, ‘Hey, we’ll come into your parish if you do this,’ that could incentivize them,” Colbert says.
By contrast, larger parishes that already generate significant revenue from the inventory tax may be far less inclined to make the switch.
In East Baton Rouge Parish, for example, where inventory taxes generate tens of millions of dollars annually, the math may not work.
“The carrot is worth less to them, relatively speaking,” Colbert says, though he’s careful to note that he has no personal knowledge of East Baton Rouge’s intentions.
For larger jurisdictions, eliminating the tax could also create sizable budget gaps that would need to be filled elsewhere, potentially through higher sales taxes or millage rates—moves that may be less politically palatable than taxing business inventory.
“I think a lot of parishes would be unwilling to opt out if doing so has a significant effect on their budget,” Colbert says.
Louisiana is one of only seven states that fully taxes business inventory, according to the Public Affairs Research Council of Louisiana.
Since 1991, C corporations have been able to offset local inventory taxes with a state tax credit. But that tax credit is set to expire on July 1, leaving business fully exposed to the cost and raising the stakes around Amendment No. 4.
As for the proposal’s chances at the ballot box, Colbert views passage as likely, in part because the amendment would bar the state from mandating any exemption from the top down.
“This was cleverly designed,” Colbert says. “There’s no real reason to oppose it because the ultimate, substantive decision is still going to be made at the parish level.”
