Landry Tax Reform Could See Louisiana Sale Tax Take a Big Jump

A couple weeks ago, it seemed like the Louisiana tax plan Governor Jeff Landry was pushing was about to sail through the state Legislature and make it to his desk quick. But suddenly the plan has hit some obstacles, and it might be enough to blow up the whole plan.

First, the huge fight surrounding the elimination of the state's Film Tax Credit program. This one appeared to be a done deal, the $150 million program was going to get dropped completely. But once it got to the State Senate's Revenue and Fiscal Affairs Committee, cooler heads seem to have prevailed. The committee amended the Film Tax Credit from $150 million to $125 million, but kept it in place until 2031.

That's big news for cities like Shreveport and New Orleans, who benefit from filming productions annually.

But the next part might actually be the shot that sinks the tax plan ship. The fight over state sales tax might turn into a battle royal, even among members of the same political party.

New taxes are the main topic here, where multiple bills deal with different ways to increase sales tax in the state. One of the bills, HB9, wants to expand the state sales tax on digital media services. This is mostly centered around digital goods and online services. Streaming platforms like Netflix and Disney+, as well as video games, and all other downloadable content. It would also expand to online stock trading. But at the same time, it would exempt online services used for corporate businesses.

Louisiana Pollster Bernie Pinsonat spoke to the Louisiana Radio Network, and he believes the plans to expand taxes like this are dead. Which may require the legislature to simply increase the overall state sales tax.

Pinsonat told the network:

“There’s the possibility they may scrap that and go to a full penny. The rumor is they would raise a lot of new revenue with the one penny, which would replace the 0.45.”

If this were to be the new path, Pinsonat says it would bring the state sales tax up to 11-cents on average. The state already has the highest sales tax in the nation, ahead of Tennessee (average of 9.55%), Arkansas (9.45% average), and Washington (9.38% on average).

Right now, it is really unclear who this is going to play out. Which is a pretty wild scenario. Because at this point last week, there were a lot of people who felt like this was a done deal.