Allain: True tax reform up to voters
Louisiana legislators have put into motion tax reform to improve the state’s personal income and business climate, state Sen. Bret Allain told a St. Mary Chamber audience Wednesday.
Now, it’s up to the voters in October to sign off on it, he said.
Allain, R-Franklin, spoke at Wednesday’s St. Mary Parish Chamber of Commerce Legislative Wrap Up luncheon at The Petroleum Club of Morgan City.
Voters will decide on Constitutional Amendments 1 and 2 Oct. 8 that Allain said will allow the state to have “true tax reform.”
The tax reform up for voter approval comes a year after seven additional bills related to tax reform were passed.
“Most of the naysayers said we would never get it done. I’m happy to say yesterday, the governor signed every one of the seven tax reform bills,” Allain said of this year’s slate of bills.
Amendment 1 deals with centralized sales taxes. Allain said currently the state isn’t able to capture those sales taxes on the internet like they need to.
“That’s important because the companies like Amazon and all the rest of them that aren’t paying their fair share of sales tax have an unfair competition with local brick and mortar businesses in this parish that have to pay the same tax,” he said. “It’s not fair. Everybody should be paying their fair share, and as we broaden the base, we should be able to lower the rate of the sales tax.”
Also, if this amendment passes, Allain said it would make things easier for those who conduct business statewide. Instead of having to work with a tax collector in every parish they conduct business, they now will have to answer to one.
“It will reduce the burden on businesses tremendously and make us a lot more competitive,” he said.
Amendment 2 focuses on personal and corporate income tax.
Allain said passing the amendment will lower income tax for the first time in state history. Under the amendment, he said the “ceiling” in the constitution would be 4.75%, a drop from 6%. To offset the drop, the state will no longer use the federal tax deduction.
Under the amendment, the state’s top personal income tax rate will be 4.25%, the middle rate will be 3.5% and the bottom rate will be 1.85%.
“When we do this tax reform, (it) will be the lowest tax rate in the South of those states that charge a personal income tax, and with the triggers that we’ve put in place, we can drive it (down) even further,” Allain said. “We will be competitive. We will attract people, and we’ll try to move this state forward.”
With Amendment 2’s passage, changes will be coming to corporate taxes, too.
“We’re finally going to start phasing out the franchise tax. …. We’re trying to attract capital investment into Louisiana, but once it’s here, we’re going to tax it? That’s what franchise (tax) is,” Allain said. “It’s a tax on capital. ‘You have capital here, we’re going to tax it.’ We’re going to finally phase us out.”
Passage of these amendments will improve the state’s ratings with taxing agencies, Allain said.
“The Tax Foundation has already told us they’re going to move us from 44th in the nation up into the mid-30s and maybe even beyond,” he said.
Allain said this year’s work is just the first phase, too.
“By the time we get out of here, the plan is for the house and the senate to work together to completely overhaul the tax rates to where we’ll be in the teens, hopefully, at least in the 20s in the ratings in this country, and with the natural resources we have and the good workforce that we have and the people we have and the correct tax structure, there’s no reason we can’t be as competitive and as booming as any state in the nation,” he said.
“That’s our goal. That’s what we’re attempting to do.”
Also during Wedn-esday’s luncheon, state Reps. Beryl Amedée, R-Gray, and Vincent St. Blanc, R-Franklin, spoke about some of the legislation they were a part of or passed.
Both worked on the M.J. Foster Promise Program, which Amedée said is dubbed “Tops for Adults.”
“The M.J. Foster Promise Program is going to help the nontraditional student who wants to go ahead to college and earn a … bachelor’s degree or go and pursue certifications that are necessary to improve their job ability,” Amedée said. “So I’m expecting not only Nicholls but our community colleges to get pretty busy here really soon.”
The bill will fund tuition of those who are ages 21 and older who don’t have a college degree and who make less than 300% of the federal poverty threshold.
“It was a big win for us,” St. Blanc said of the impact in the area.
Both also worked on the Fairness in Women’s Sports Act, which prohibits transgender athletes from competing in women’s sports. While Amedée’s bill failed in committee, she said after public push back, an identical bill from the senate passed both chambers of the legislatures.
“The Fairness in Women’s Sports Act ensured equal opportunities to students participating in sporting events,” St. Blanc said.
While the bill passed the legislature, Gov. John Bel Edwards vetoed it Tuesday.
“So now the talk is will we or won’t we have enough support among legislators to go into a veto override session?” Amedée asked. “Well, stay tuned. I don’t know. That’s what we have to figure out.”
A veto override session would begin July 20.
St. Blanc also discussed House Bill 532, which now is known as Act 33. It addresses “intrastate movers of household goods,” according to the bill. In it, contract limits will be removed “for certain common carrier certificate requirements for movers of household goods.” St. Blanc said the bill received no votes in opposition during the legislative process.