The Department of Revenue today confirmed an Advocate report that describes unreleased details about Gov. Bobby Jindal’s tax reform proposal. The details are part of a framework for discussion and do not represent a final proposal. Jindal suggests increasing the state sales tax from 4% to 5.78%, eliminating severance tax exemptions, and raising the cigarette tax by more than $1 a pack. The administration also wants to create a single sales tax collector, called the Louisiana State and Local Sales Tax Commission. State and local governments still would be allowed to make tax-free purchases. Business exemptions the governor wants to keep include “those involving natural gas, vessels and telephone companies.” According to the report, legislators were allowed to review a two-page outline of the proposal during a briefing. The outline was collected at the end of the meeting, but one legislator took a picture that apparently was leaked to a reporter. Generally speaking, the administration wants to eliminate state income taxes and corporate franchise taxes, but raise the same amount of money by increasing sales taxes, closing or scaling back exemptions, and taxing services not currently taxed by the state.
Editor’s note: Tim Barfield, head of the Department of Revenue, has released the following statement: “There are a number of different scenarios being shared with legislators and stakeholders about how to accomplish our goal of eliminating the personal and corporate income tax in a revenue neutral way. We’re working collaboratively with legislators and stakeholders on the best way to reach that goal so we can help grow Louisiana’s economy and create more opportunity for our people. This is going to be a very collaborative process and the models will be in flux and discussed before and throughout the session with legislators and stakeholders. Right now, nothing is final other than our goal of eliminating the personal and corporate income tax in a revenue neutral manner.”.
