LABI chief: State needs streamlined sales tax collection – American Press
The head of the Louisiana Association of Business and Industry on Monday expressed support for four constitutional amendments in the Nov. 13 poll, including two that would help small businesses by streamlining local sales tax collection statewide and simplifying the state tax code.
Stephen Waguespack, president / CEO of LABI, said during a presentation at the Seed Center that Amendment # 1 would create a single sales tax commission, which Louisiana desperately needs. Amendment 2 would lower the limit on the state’s personal income tax rate from 6% to 4.25% and lower the corporate tax rate.
While most states only have one tax collector, Louisiana retailers must remit sales taxes to as many as 54 local collectors, Waguespack said. This complex system places Louisiana 49th in the country in terms of tax collection, he said.
“It’s an absolute spiderweb of regulation and taxes that, if you’re a business that’s just trying to compete in a pandemic economy, gets you under control,” Waguespack said.
If voters approve Amendment No 1, an 8-person commission – four members chosen by the state and four chosen by local collectors – would create the rules and regulations, Waguespack said. It will create an entity through which companies will be audited and evaluated.
“It will take us out of the dark ages and into modern times, economically,” he said. “You have to be that way in the ecommerce economy. “
Waguespack said businesses along the east and west coasts are leaving because they are tired of those states’ taxes and regulations. These same companies are interested in southern states, such as Texas, Tennessee and Florida.
Louisiana might compete for these businesses, but it has a 6% personal tax rate and an 8% corporate tax rate. Meanwhile, Texas has no personal or corporate income tax. Mississippi has a personal income tax rate of 5% and a corporate tax rate of 5%. Louisiana also levies taxes on franchises and inventory, which do not exist in most other states.
“We have to realize that our competition is doing a better job on spreadsheets than we are,” Waguespack said.
Amendment 2 is a revenue neutral approach as it is funded by the elimination of the federal tax deduction, Waguespack said. When President Donald Trump cut taxes in 2017, Louisiana did not take full advantage of it, as part of it went to state government.
“Because you were paying less federally, you were paying more to the state because you had less to deduct,” he said.
Lowering the personal income tax cap from 6% to 4.25% would make it the lowest rate in the southern United States among states that have it, Waguespack said.
“So we’re on the right track to be more competitive if we pass this thing,” he said.
To learn more about the changes, visit untanglemytaxes.org.