This business group likes the Louisiana tax plan. Here are their suggestions to make it better.

There’s another full week to hash out what amounts to a major overhaul of Louisiana’s tax plan.

On Monday, the Committee of 100, a group that is made up of business representatives from around the state, weighed in with support tempered with suggestions.

C100 CEO Adam Knapp said it was important that members have the time to look through the details of all the bills and to give feedback.

“A lot has been changing through the process,” he said, “and we’ve been watching those changes.”

In 2015, the C100 provided the state with a study that the business organization says was very similar to Governor Jeff Landry’s current proposed plan. A 2023 RESET Louisiana study funded by Council for A Better Louisiana, the Public Affairs Research Council and C100 urged significant tax change to boost population growth and what was found to be “dismal” personal income growth.

Knapp says the C100 is supportive of the governor’s tax changes overall, but there are eight areas that they are concerned enough about to point out.

Anticipate the costs for incentives that may replace credits

Several entities advocating for the continuation of a variety of tax credits said that they have been told by Governor Landry’s office that additional Louisiana Economic Development funding will be available to take the place of credit dollars. 

The C100 says any “replacement economic development programs” that might take the place of film, angel and other tax credit programs should be included in the Governor’s 2025-2026 budget plan.

The state’s Historic Tax Credit should be retained

The state’s historic tax credit, which provides up to 25% return on the qualified costs of a historic building rehab in urban areas, and up to 35% in rural areas, should be retained, but “perhaps with a lower cap,” C100 said.  The cap is currently $125 million per year. If the cap is not used, money can roll over to the following year.

“We generally feel that the program’s value for the historic rehabilitation tax credit is greater than the benefit of what the changes might be,” Knapp said.

“We feel like this is a really important program for the state, more impactful to keep it even at a lower cap than to eliminate it.”

Knapp said he believes that if the state chose to make it a grant-type program, that could work as well.

Eventually phase out inventory tax and credit altogether

“Our view is that it has been a negative for Louisiana to have an inventory tax,” Knapp said. “But at the local level, it does create challenges for local governments that are dependent on it.”

He said there are a handful of parishes that might need a state subsidy beyond the current state-offered one-time payment in order to give up the inventory tax.

Municipalities around Louisiana collect a local inventory tax, a tax the state wants to do away with. The state is offering a carrot to parishes to end the tax willingly by offering a one-time payment of up to three times the parishes’ current annual business inventory property tax collections.

C100 says that is not going to be enough for some parishes to make the switch, and is suggesting that the state retain the inventory tax credit for those parishes that do not accept the buy out until the state can phase out both the local tax and state inventory tax credit.

Centralize sales tax collections in Baton Rouge

Local municipalities are fiercely protective in collecting sales taxes. Municipalities’ concerns include loss of local control, fear that they may not get their just due and worry about the timeliness of remittances.

C100 says the benefit of a single tax collector outweighs these concerns and is asking the governor and legislative leadership to centralize tax collections in the 2025 fiscal session. Knapp said he knows that this will be a “sensitive” issue and there needs to be time to hash all the details out.

This is one of the top concerns of C100 members, he said.

“You know, one of the main arguments for the whole package is that it will improve the state’s tax ranking with the Tax Foundation,” Adam said. “This (sales tax collections) is one of those things that negatively impacts our tax ranking.”

Some education funding needs to be replaced

Funding for early childhood education and higher education research endowments need to be replaced with a recurring dedication of equal value in the 2025-26 general budget, said the C100.

All the disparate pieces need to live or die together

The C100 believes that the bills that cut and add need to be linked together so the whole project succeeds or fails as a single package.

Change some effective dates

The corporate and personal income tax effective dates should be pushed back to January 1st, 2026. The sales tax effective date should be pushed back at least to July 1st, 2025, in alignment with the start of the state’s fiscal year.

Changes to sales taxes

In order for the governor’s tax changes to money out, the administration needs the continuation of an 0.45 percent sales tax due to expire as well as approval of an additional list of products and services that will be taxed. The C100 says any sales taxes on services should avoid business to business transactions by definition and they would like to see sales taxes eliminated on disaster-related insurance proceeds or homeowner reconstruction from federal recovery grants.

The special tax session ends at 6 p.m., Monday.