Which services would face new taxes after tax reform?

Since the Jindal administration proposed eliminating all state income taxes, along with corporate franchise taxes, most of the speculation has focused on how high the sales tax would be raised and which exemptions would be eliminated or scaled back to raise the same amount of revenue. Less attention has been focused on which services the state will tax that it hasn’t in the past. But Tim Barfield, who leads the state’s Department of Revenue, says that new taxes on services might be as important to the new revenue mix as closing exemptions. The ratio might not be 50/50, he says, but it could be close. Texas, for example, taxes more construction and oil- and gas-related services than Louisiana, Barfield says. “There’s certain repair services we tax, and certain ones we don’t. There’s certain grooming services we tax, and certain ones we don’t,” he says. “One of the things we’ve done is look at, how can we make some sense of that? We should be logically consistent.” Barfield stresses that the package is still a work in progress, and the administration continues to meet with stakeholders. As pointed out in a policy brief released by CABL Feb. 1, “In Texas consumers pay sales taxes on a variety of cable and satellite TV services, credit reporting services, data processing services, information services, custodial and janitorial services and even security services. For the most part, none of those things are taxed in Louisiana.” —David Jacobs