Roughly a week after the state Legislature adjourned its second special session—and the fourth of 2016—several major tax changes are taking effect Friday, when the new fiscal year begins, that will impact Louisiana businesses.
Ahead of the changes, the Louisiana Association of Business and Industry issued an email outlining the changes and advising its members to consult with their tax advisers and CPAS on how the changes will affect their operations.
Here’s a look at a couple of the acts Gov. John Bel Edwards signed below:
- Act 4, by Sen. J.P. Morrell, D-New Orleans, restores the entire refundable inventory tax credit for small and medium-sized businesses. The bill also eliminates the refundability for inventory tax credits that are more than $1 million and establishes a five-year carryforward provision instead. The law affects claims filed on or after Friday.
- Act 5, by Sen. Rick Ward, R-Port Allen, converts the inventory tax credit to a nonrefundable credit with a five-year carryforward provision for taxes that manufacturers, also receiving the ad valorem industrial tax exemption, pay on inventory.
- Act 25, by Rep. Jay Morris, R-Monroe, temporarily removes more than 150 exclusions and exemptions—such as the suspension of the sales tax exemption on business utilities and a partial suspension of the exemption of the manufacturing machinery and equipment—from the 4% of the state sales tax.
- Act 26, by Rep. Katrina Jackson, D-Monroe, temporarily imposes a 1% state sales tax and suspends 125 exclusions and exemptions from the new tax so that business utilities and manufacturing and equipment would be subject to the tax.
LABI says the new sales tax rate as of Friday will be 4% on business utilities and 1% on manufacturing machinery and equipment.
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LABI has created a chart summarizing bills from the second special session.
