Gov. Jindal proposed a plan to repeal inventory tax in an effort to close the budget gap. Here’s an update on the issue.
Earlier this year, as part of a plan to close a $1.6 billion budget gap, Gov. Bobby Jindal proposed a repeal of the inventory tax credit, a significant source of tax relief for Louisiana business owners.
Currently, under the tax credit program, business owners pay tax on unsold inventory to their local governments at the end of each year. Then, when they file their state taxes a few months later, they are reimbursed the full amount they paid by the state government. A full or partial repeal of this tax credit will result in higher tax bills for thousands of business owners.
NFIB/Louisiana has been working with Senate leadership to protect small business owners against this repeal. So far, NFIB has been able to scale back the repeal percentage—to 25 percent from the original 45 percent being discussed when the bill came before the Senate Finance Committee. This means small business owners who receive an inventory tax credit would now only receive 75 percent of the amount they usually expect to be refunded, says Dawn Starns, NFIB’s Louisiana state director.
The legislation—House Bill 805—will face Senate action in the coming days, and NFIB/Louisiana is still working to secure more relief for small businesses.
