BATON ROUGE — Gov. John Bel Edwards has pushed back the release of his tax rewrite proposal, taking an extra two days to pull together the centerpiece of his legislative agenda amid questions about a new business tax he’s backing.
The Democratic governor had intended to unveil details of the much-anticipated tax package Monday. But those specifics instead will come out Wednesday, fewer than two weeks ahead of the April 10 legislative session opening.
“He wants to make sure we get it right,” Edwards spokesman Richard Carbo said Monday.
Carbo said the governor wanted to finish his closed-door meetings with lawmakers and get additional data from the revenue department before putting the finishing touches on his proposal to replace corporate income and franchise taxes with a corporate tax on sales.
That tax proposal — called a gross receipts tax — was a surprise change to the agenda, not among the ideas backed by a legislatively created tax reform task force. Lawmakers, business groups and lobbyists were caught off-guard by the proposal, which Edwards started floating two weeks ago, and they’ve been scrambling to find out more information ever since.
Even though Carbo said the specifics of the gross receipts tax plan “are still being nailed down,” the governor’s spokesman said he’s confident the administration will “have plenty of time” to educate lawmakers and win support for the idea in the two-month legislative session.
“They understand broadly what the gross receipts tax idea is and where we’re going with it,” he said. “It’s not a conversation that we’re just beginning with them on Wednesday. It’s a conversation that’s been going on for a couple of weeks.”
Edwards and legislative leaders have talked for more than a year about rewriting Louisiana’s tax laws to stabilize state finances and end continued cycles of deficits. Lawmakers passed a temporary, 1-cent sales tax last year to fill gaps, with a mid-2018 expiration date. The governor is looking for ways to replace the more than $1 billion annually that will disappear with the tax.
Edwards is expected to support the expiration of the temporary sales tax hike. In exchange, he wants to extend the state sales tax to the purchase of some services, though which ones are unclear. The governor also wants to rework the myriad of state tax breaks.
The gross receipts tax has drawn the most attention, because it’s unfamiliar in Louisiana and seems to form a large basis of Edwards’ planned tax rewrite.
The tax is charged on the total revenues of a company, without looking at expenses or profit margins. A handful of states have some variation on the tax. Republican former Gov. Mike Foster proposed something similar in 2000, but it went nowhere.
Edwards’ chief legislative allies haven’t embraced the gross receipts tax, saying they don’t know enough yet.
The tax landed on Edwards’ radar because he assumed some task force suggestions can’t win passage since they previously were snubbed by voters or Republican lawmakers who form the legislative majority.
Barry Erwin, president of the nonpartisan Council for A Better Louisiana and a task force member, questioned whether there’s enough time to drum up interest in a tax type with which Louisiana lawmakers have little familiarity.
“It’s going to be tough. You have to discuss these things for a while and give these ideas time to germinate, and I think in a few weeks, that’s going to be really difficult to do,” Erwin said.