John Bel Edwards’ signature tax proposal killed in Louisiana House
LOUISIANA REALTORS • April 26, 2017
Source: The Times-Picayune • New Orleans, La • April 25, 2017
By: Julia O’Donoghue
The lynchpin of Gov. John Bel Edwards' plan to overhaul Louisiana's tax system was killed in a Louisiana House committee Tuesday (April 25). Edwards couldn't muster enough votes for his commercial activity tax, contained in House Bill 628, even after significantly lowering the amount of money businesses would actually have to pay as a result of the measure.
Rep. Sam Jones, who was sponsoring the bill for the governor, asked that the legislation be "voluntarily deferred" -- rather than having a vote that would kill it. The move allowed Democrats and others on the committee -- who might not want to choose between supporting the Democratic governor and the business community -- to avoid having to make a decision on the bill at all.
When Edwards initially announced his plan for the commercial activity tax, it was supposed to raise between $800 million and $900 million annually. By the time it came before the committee Tuesday, it was only expected to generate $288 million annually. The House Ways and Means Committee, which oversees tax policy for the Legislature, still wasn't willing to vote for it.
The commercial activity tax was essentially a gross receipts tax on the sales of goods and services. It acts like a sales tax except the seller, not the buyer, pays it. It also applies to many more transactions than the sales tax in Louisiana.
Over the 24 hours before it came up in committee, the Edwards administration made significant changes to the bill to try to generate more support for it. They removed S-corporations -- such as limited liability companies and partnerships -- from being subjected to it in an effort to answer the concerns of smaller businesses. They also lowered the amount of tax many of the remaining entities subjected to it would have had to pay.
Still, representatives from the oil and gas industry, homebuilders, paper mills, a local restaurant chain and the state's small business association testified that it would devastate them Tuesday. "This bill is going to kill the very industry we depend on," said Chris John, of the Louisiana Mid-Continent Oil and Gas Association.
Donny Rouse, representing Rouses Supermarkets, also said his business would be significantly affected by the commercial activity tax -- even though the governor's team had tried to amend it to ease the concerns of grocery stores. Rouse said he operates on too tight a profit margin to pay a tax on every item he sells in his 45 stores in Louisiana.
"This would double what we pay the state in taxes currently," he said in an interview. "This would be a tax, whether we make a profit or not."
Edwards had proposed the commercial activity tax as a replacement to the higher sales tax rate that is set to expire on July 1, 2018. When the state sales tax rate drops from five percent to four percent, it will create a $880 million hole in the state budget. The governor and House Republican leadership have not reached an agreement on how to close that budget gap yet.
NAR’s latest consumer guide, “10 Tips for Unpacking Smartly After a Move,” was developed to help ease the burden buyers may feel when surrounded by boxes. For your clients on the cusp of a move, the guide suggests establishing a priority unpacking order, wiping down each room before unpacking, discarding boxes quickly, having garbage and donation bags at the ready, and more. Share the new guide along with the companion guide “10 Tips for Packing Smartly for a Move.” As a reminder, all guides in this series are available for download—in both English and Spanish—on facts.realtor . Please allow up to two weeks for the Spanish version of the latest resource to be translated and uploaded. For ease of reference, below is a list of the most recent guides: NEW: 10 Tips For Unpacking Smartly After A Move UPDATED : Multiple Listing Services Overcoming Roadblocks to a Sale or Purchase How Solar Impacts a Real Estate Transaction Navigating Interest Rate Shifts Thank you for your continued engagement with the “Consumer Guide” series and for sharing the resources with prospective clients to ensure they have the information they need to find success in their home buying or selling journey. Remember that these guides are for informational purposes only and are not meant to enact or change any existing NAR policy. Check out the next consumer guide on identifying homebuying wants vs. needs.
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From the Louisiana Department of Insurance: During a press conference today with Governor Jeff Landry, Insurance Commissioner Tim Temple announced that registration for the next round of the Louisiana Fortify Homes Program (LFHP) will open at 8 a.m. on Monday, June 1, and will include 3,000 grants. The registration period for this lottery will be open for three weeks, closing at 5 p.m. on Friday, June 19. During the press conference, Gov. Landry signed HB 1187 by Rep. Paul Sawyer, which will allow Louisiana Citizens Property Insurance Corporation to transfer $50 million in additional Katrina bond assessment funds to the LFHP. Combined with the $30 million in funding the program will receive through taxes and fees on insurance entities, the LFHP will receive a total of $80 million this year. “By lowering overall losses, we can reduce insurance and reinsurance costs, draw more insurers into the market, motivate existing companies to write additional policies and lower insurance premiums,” said Commissioner Temple. “That is exactly what the Louisiana Fortify Homes Program is designed to do.” The list of coastal parishes that are eligible to participate is expanding to include Acadia, Jefferson Davis and Lafayette parishes. Additionally, homeowners who live in the portions of Ascension, Calcasieu, Iberia, Livingston, St. Martin, St. Tammany, Tangipahoa and Vermilion parishes that were previously not included in the program will now be eligible to participate. A map showing the full list of eligible parishes is available on FortifyHomes.La.Gov . “Louisiana is the fastest growing state in the country for Fortified roofs, and that growth is not by accident—it is the result of strong support from Governor Landry and legislators like Chairman Talbot, Chairman Firment and Representative Sawyer, targeted program design, and a clear recognition that strengthening homes is one of the most effective ways to reduce insurance losses,” said Commissioner Temple. “At the end of the day, this program is about more than just roofs. It is about protecting families, it is about strengthening communities, and it is about putting Louisiana in a stronger position—both physically and economically—to face the challenges ahead.” To participate in the lottery, homeowners must register during the June registration period. Homeowners who registered for a previous round but were not selected must register again to participate. People who register on the last day of the registration period have the same chance of being selected as those who register on the first day, so there is no need to rush to register as soon as the period opens. When registering, homeowners will need to upload their homestead exemption, insurance policy declarations page that includes wind coverage, and flood insurance declarations page if the residence is in a flood zone. Homeowners who need assistance obtaining a copy of their homestead exemption should contact their parish tax assessor. Homeowners can contact their homeowners and flood insurance companies or agents for a copy of their policy declarations page. Homeowners are required to create a profile in the LFHP system before registering for the lottery and may do so by visiting the LFHP website and clicking the Login button. Homeowners who previously created a profile may use the same one for this and future rounds. Once the lottery registration period closes, the LFHP will randomly select 3,000 participants and send email notifications to registrants about whether they were selected to participate. These selection notices will be sent via email beginning on Monday, June 22. There are several program requirements that homeowners should be aware of before registering. Those interested in the program are encouraged to review eligibility information and frequently asked questions at FortifyHomes.La.Gov to determine whether their home meets the requirements for the program. If selected to participate in the grant program, homeowners will be financially responsible for having the home evaluated by a FORTIFIED-certified Evaluator as well as costs for the roof upgrade including permits, inspections and construction costs beyond the amount of the grant The LFHP provides grants of up to $10,000 for homeowners to upgrade their roofs to standards set by the Insurance Institute for Business & Home Safety. The program helps Louisiana homeowners strengthen their roofs to better withstand hurricane-force winds.
