One of two proposed state constitutional amendments to ease the tax burden on Louisiana business passed in Saturday’s general election.
With about 14 percent voter turnout, Amendment 1 failed to pass. NFIB State Director Dawn McVea said she believes the measure failed in large part because of opposition from local officials, especially in Orleans Parish. If approved, the amendment would have allowed Louisiana small business owners to be competitive with out of state, big-box retailers.
“The only way to capture all the revenue due to the state and local governments via online sales tax collection and thereby potentially reduce our highest in the country sales tax rate is to move to a centralized tax collection,” McVea said. “We look forward to supporting a renewed effort to pass the legislation and amendment in 2022.”
In the state’s first step toward real tax reform in years, voters did approve Amendment 2. It decouples individual income tax rates from the federal government by removing the federal income tax deduction and lowering the top rate from 6% to 4.25%.
Additionally, Amendment 2 provides for the elimination of the corporate franchise tax on the first $300,000 of taxable income for small business owners.
“The reform measures put in place by the passage of this amendment will be beneficial to small business owners by giving them a more simplified and predictable tax code that won’t change at the whim of federal tax changes,” McVea said. “Additionally, future rate reductions are available should Louisiana’s economy grow.
“All in all the passage of Amendment 2 means progress for Louisiana and our small business owners,” she said. “NFIB will continue to support legislation that will improve the burden small business owners face when it comes to the overly complex sales tax structure Louisiana has.”