07252017Headline:

More taxes! By: Christian Prevost

More taxes!

By: Christian Prevost

John Bel Edwards has been Louisiana’s governor since Jan.11.   The new governor has to solve the state’s worst midyear deficit of $750 million, an issue Louisiana hasn’t experienced in over three decades.  The solution for this dilemma:  nine different tax increases.

 

1.Telephone taxes

The average cellphone or landline user pays a 2 or 3 percent tax, based off what kind of phone you use, flip or smart.  The tax increase will be 5 percent added to your bill for any phone, even out of state area code cell phones whose bills come to a Louisiana address.

 

2.Sales taxes

Tax increase on all items purchased at your local stores, you will pay a 5 percent tax instead of the old 4 percent.  This tax increase is on the state level, not the federal. Benefits are scarce with this increase, but it will raise needed revenue.

 

  1. Tobacco tax

Smokers are paying 86 cents in taxes on a pack of cigarettes now, but with the increase they will pay $1.08 a pack. Possible benefits: a decrease in smokers.  Not many benefits for smokers.

 

  1. Internet sales tax

This tax will add extra taxes to all item purchased online from websites with physical stores in Louisiana. This tax is beneficial, because most online sales weren’t charging adequate taxes.

 

  1. Alcohol taxes

At the moment Louisiana has one of the lowest taxes on alcoholic beverages in the Southern states.  Gov. Edwards gave a rough estimate of the increase, going from $2.50 per gallon to $5.50 per gallon for all alcohol sales. A six-pack of beer would cost $2.75 more because of the tax.

 

  1. Personal income tax

This tax raise will impact your yearly tax return more than anything.  The increase will give the average tax payer less money back on state tax refunds.

 

  1. Federal tax deduction

This would affect the wealthy more than the poor, and middle class.  They would no longer be able to receive a 100 percent charitable or mortgage interest payment deductions. They will now only be able to file 50 percent, which will affect homeowners and those who give to charity.

 

 

  1. Rental car tax

Car rentals will now charge a 3 percent tax on all rental vehicles.  Louisiana has not had a tax on rental cars since 2014, when Bobby Jindal allowed the law taxing rentals to expire. This tax won’t affect all Louisiana residents, but will be harder on travelers and tourists.

 

  1. Short-term rental and online travel service tax

This will raise taxes on hotel stays, making rooms more expensive for out-of-towners.

 

Most of these tax increases will begin April 1, with others coming later in the year.  The goal of these increases is to clear the deficit and provide funds for next year’s budget.  There is a question of whether the sales tax and short term rental will continue after the first year, but the majority of the increases in taxes are permanent.

 

 

 

 

 

 

 

 

 

 

 

 

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