What Small Business Owners Should Know about Gov. Bel Edwards' Budget Proposal

Date: February 02, 2016

"Menu of options" to close $1.9 billion budget deficit is not business-friendly.

What Small Business Owners Should Know about Gov. Bel Edwards' Budget Proposal

Faced with a $1.9 billion budget gap, Governor John Bel Edwards recently proposed a slate of options for generating new revenue, which has received mixed reviews.

Per The Times-Picayune, here’s a look at some of the options on the table:

  • Eliminate the ability to deduct federal taxes from state income taxes
  • Change or eliminate the overall amount of federal itemized deductions that can be deducted from state taxes
  • Reinstitute the Stelly Plan personal income tax brackets, which would apply the highest tax rate of 6 percent to more people
  • Reduce tax credits that businesses use
  • Increase the sales tax (to 5 cents a dollar) and expand sales tax to a variety of services
  • Make the telecommunications tax equal to the sales tax (5 percent)
  • Eliminate the business utilities tax exemption
  • Institute a rental car tax
  • Expand tax on hotel rooms to short-term rentals, such as Airbnb
  • Increase the tax on alcohol and tobacco

While Gov. Bel Edwards has spoken of the need for “shared sacrifice” in plugging this budget hole, and the fiscal policy report that outlined these options stressed the attempt to spread tax increases evenly and broadly, NFIB’s Louisiana State Director Dawn Starns spoke to the Associated Press about the significant hit small businesses would take.

“Pretty much everything on that list, we feel would be impactful to small businesses,” Starns says. “Just a cursory look at these, we do not feel our members are going to be supportive of this.”

Lawmakers will gather for a special legislative session beginning Feb. 14 to work on the budget.

Related Content: Small Business News | Economy | Louisiana | Taxes

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