STATEMENT: Small Business Favors Plan to Phase Out Inventory Tax
Dawn Starns, state director of the National Federation of Independent Business, released the following statement today in response to LSU economist Jim Richardson’s proposal to the House Ways and Means and Senate Revenue and Fiscal committees that the Legislature eliminate the onerous inventory tax:
“The inventory tax is a bad idea. It’s always been a bad idea, and it’s time for lawmakers to bring Louisiana into the 21st century and kill it.
“Basically, the property tax on business inventory penalizes businesses for having unsold merchandise. Local governments collect the inventory tax, then state government returns the money to businesses in the form of a refundable inventory tax credit.
“Put simply, it’s a government-mandated interest-free loan to local government, and that simply isn’t fair.
“Right now, there’s talk of eliminating the refundable tax credit because of the state’s $1.6 billion budget shortfall. When we asked our members earlier this month whether the Legislature should eliminate the refundable inventory tax credit from the 2015-16 state budget, 85.6 percent of respondents said ‘no.’
“Eliminating the refundable tax credit would save the state only $377 million a year, not enough to put a dent in the budget shortfall but more than enough to cause problems for small, family businesses.
“If the Legislature is serious about stimulating the economy, it will take Dr. Richardson’s advice and phase out the inventory tax altogether over a period of a few years. At the very least, lawmakers should leave the refundable inventory tax credit alone to offset the tremendous cost of the local inventory tax.”
NFIB/Louisiana is the state’s leading small-business association with over 4,000 dues-paying members representing a cross section of the state’s economy. Learn more at www.NFIB.com/LA or follow @NFIB_LA on Twitter.
