Louisiana – Governor Releases His Plan to Expand Sales Taxes

SALT Report 2265 – Louisiana Governor Bobby Jindal unveiled his administration’s proposal to end state income taxes by eliminating tax loopholes and broadening the state sales tax base. Highlights of the proposal include:

  • Expanding the sales tax base by raising the state sales tax rate to 5.88%
  • Eliminating over 200 sales tax exemptions
  • Creating a uniform sales tax base for remote sales
  • Creating a Sales Tax Commission to act as collector, auditor, interpreter, and rule-maker for state and local sales taxes
  • Implementing a tax amnesty plan, and
  • Creating a single state tax court to hear all types of tax cases

Sales tax exemptions that will remain include those for:

  • Food for home consumption
  • Utilities
  • Prescription drugs
  • Fuel
  • Manufacturing, machinery, and equipment
  • Farm and agriculture
  • Drilling rigs
  • Vessels greater than 50 tons
  • Tangible personal property for lease or rental
  • Manufacturers’ rebates and trade-in value on new vehicle purchases
  • Vendors’ compensation
  • Non-profit organizations, and
  • Purchases by federal, state, and local governments

The services the Governor proposes to add to the state sales tax base include personal, professional, and other services that are currently excluded from the state sales tax base. However, the following services will be excluded:

  • Healthcare
  • Education
  • Construction
  • Real estate
  • Financial services
  • Legal services
  • Oil and gas services, and
  • Funerals

The effective start date of the provisions in the proposal is January 1, 2014.

For Further Information

Office of Louisiana Governor Bobby Jindal – Press Release