NFIB worked diligently on your behalf to make your voice heard during the 2021 legislative session. While several problematic bills didn’t make it through the legislature, we are sure they will make another appearance next year. For now, we would like to focus on the small business wins for 2021 and thank the legislature for their support!
Addressing the labor shortage
We have heard your concerns that these enhanced benefits have impacted your ability to find qualified workers for several months. In turn, it affected your ability to get back open and operating at pre-covid levels. If the governor follows House Bill 183, he will be requesting an end to these federal benefits effective July 31, 2021. This legislation, sponsored by Rep. Chad Brown, also provides a $28 per week increase to unemployment benefits beginning Jan. 1.
Shoring up unemployment trust fund
The legislature appropriated $490 million in American Rescue Plan Act funds to help replenish the bankrupt fund. Of that, $190 million will repay the debt incurred when the fund went bankrupt, and $300 million will go back into the base of the fund. However, the UI Trust Fund will need another infusion of the second round of rescue dollars to get it remotely close to the pre-COVID balance.
Centralized sales tax collection
As one of four states in the country without a unified system for sales tax collection, the legislature finally passed HB 199 by Speaker Clay Schexnayder. This is a proposed state constitutional amendment that would make centralized sales tax collection a reality. Louisiana’s existing system has left hundreds of millions of tax dollars on the table, leaving small business owners to bear the brunt of fiscal cliffs and budget shortfalls. Additionally, it has made big box, out-of-state companies better positioned to be successful than Louisiana small business owners on Main Street. The next step is in your hands! This constitutional amendment will be on the Oct. 9, 2021, ballot.
Corporation franchise tax may be eliminated
About 30% of small business owners file as a corporation. If you’re one of them, you’ll benefit from the suspension of the first tier of tax through July 1, 2023, and the elimination of the tax on the first $300,000 of taxable capital beginning Jan. 1, 2023. This is one of the pieces of the tax reform package that are all linked and only effective if all pass on Oct. 9.
Lower income tax rates
With the passage of HB 278 by Rep. Stuart Bishop, Louisiana small business owners who file as individuals, roughly 70%, will benefit from a more simplified tax code and a lower tax rate. Due to the current complicated structure tied to the federal tax rates through the Federal Income Tax Deduction, Louisiana has long had a higher top tax rate in addition to missing out on the full benefits of the Trump Tax Cut and Jobs Act. Again, the outcome is in your hands. The measures to achieve this historic tax reform are tied together and require passage on the Oct. 9 ballot.