Here's What the Special Session Means to Small Business

Date: March 11, 2016 Last Edit: March 15, 2016

We just wrapped up a three-weeklong fiscal special session to address
Louisiana’s $1 billion mid-year deficit for 2015-16–and a looming $2 billion
deficit in fiscal 2016-17. 

NFIB/Louisiana worked to insure the voice of small business was
heard while also trying to be part of the solution to the overall fiscal
crisis. 

Small business was at the table throughout the special
session, insisting that lawmakers consider what tax policy would mean to small, family businesses.

Key revenue-raising bills we helped kill

Landlines
and cell phone taxes

  • NFIB helped kill the 5% increase to the taxes currently imposed as proposed by the
    governor in the form of HB 72. Our members said the taxes ranked among the most painful for small business. As passed, the bill renews the existing tax but doesn’t include a tax increase.

Inventory tax credit repeal

  • NFIB
    opposed the reduction of the inventory tax credit, which is meant to offset
    the cost of the inventory tax business pays to local government. HB 46 and 47 and SB 6 were all killed in their respective
    chambers due in part to NFIB’s opposition.

On a positive note, NFIB supported
SCR 6, which creates a task force to study and make
recommendations on how to address the inventory tax and the credit so that
business can get out of being the middle man for state government funding local
government.

Net
operating loss (NOL) deduction

  • HB
    25 sought to reduce the NOL deduction to 50%, which NFIB opposed
    in committee, where this measure failed to pass.
  • A
    revision to this deduction passed last year and additional clarity to was made
    to it this year, which prohibits a company from taking a NOL of more than 72%
    of its Louisiana net income.

Expansion
of the corporate franchise tax

  • NFIB
    monitor this legislation and successfully worked to insure Louisiana-based
    small businesses were not negatively impacted by this expansion. HB 19 expands
    the franchise tax to capital, plants or property directly or indirectly owned
    by LLCs taxed and treated like LLCs at the federal level. It does not apply to
    LLCs that elect to be taxed as sub-chapter S corporations.

Revenue-raising measures that passed

“Clean” new penny state sales tax

  • The state sales tax will increase from 4% to 5% from April 2016 to June 2018. The measure also  and limits the exclusions and exemptions to the existing 4% tax,
    including business utilities and MM&E, which are subject to the new tax from
    April through June, 2016.

“Clean” existing pennies of state sales tax

  • Various exclusions and exemptions from the 4% state
    sales tax were removed, including business utilities. The exclusions will run from April through June 2016.
  • Various exclusions and exemptions were removed from 2%
    of the state sales tax, including business utilities, from July 2016 to June 2018.

 

 

Related Content: Small Business News | Louisiana | Taxes

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