The Louisiana Chemical Association has filed a lawsuit challenging one of the tax changes recently enacted by state lawmakers to balance the state’s budget.
The lawsuit strikes at legislation that temporarily suspended a 1-cent sales tax exemption on business utilities, expected to raise $103 million in the budget year that began Wednesday, The Associated Press reports. The tax hike is expected to fall heaviest on chemical plants.
The association is asking a Baton Rouge judge to declare the legislation unconstitutional because it didn’t receive support from two-thirds of House lawmakers. House leaders ruled only a majority vote was needed to pass the bill.
“The Louisiana Constitution says tax measures must originate in the House and pass both houses by a two-thirds vote. House Concurrent Resolution 8 did not, and we believe it’s unconstitutional,” says LCA President Dan Borné in a news release issued this afternoon. “This is a business-only tax. It falls 100% on the Louisiana business community and places a particularly heavy burden on the petrochemical industry.”
The LCA consists of 64 member companies which operate 108 plants in the state, which collectively employ more than 28,000.
Lawmakers scaled back dozens of tax breaks during this year’s session to generate more money for the state treasury and stop deep cuts to public health care services and colleges. Several industries have threatened lawsuits.
