Apostle Dr. Lue Russell, in opposing Gov. Landry’s sales tax expansion, provides preview of one of the “bitter pills” portion of plan expected to play out either Tuesday or Wednesday in House Ways and Means Committee.

On Saturday, October 12, 2024 Apostle Dr. Lue Russell (center of photograph) spoke before a community gathering in Hammond, Louisiana to voice her opposition to one segment of Gov. Landry’s tax reform package (i.e. one component of a “bitter pill” as characterized by media outlets).

Here’s a brief update on the status of some of the key bills pertaining to Gov. Landry’s tax reform package:

HB-1: (Lowers maximum income tax rate for individuals to 3% and completely eliminates the tax being imposed on taxpayers in the lowest tax bracket).

Passed House Ways and Means 15-3; passed House Appropriations 19-0.  Awaits action by the Full House.

HB-2 (Lowers corporate tax rate from 7.5% to 3.5%).

Some testimony taken in House Ways and Means on Friday, 11/8, with testimony to resume on Sunday, 11/10 at 3:30 p.m.

HB-3 (Repeals corporate franchise tax).

Passed House Ways and Means (with amendment entailing when the bill, if passed, would become law) 17-1.

HB-4 (Appropriates additional approximately $3.5 million in ’24 – ’25 FY from existing statutory dedications).

Passed Appropriations 19-0.  Awaits action by the Full House.

HB-5 (Funds teacher salary increase via savings from Teacher Retirement Unfunded Accrued Liability – UAL).

Awaits House Education action scheduled for Tuesday, 11/12.

HB-6 (Calls for 3/29/25 Special Election for Constitution Amendment).

Awaits action by House and Governmental Affairs which has not yet been scheduled.

HB-7 (Constitutional Amendment:  provides changes to Louisiana’s Constitution entailing revenue and finance).

Here’s a recap:

Proposed constitutional amendment contemplates a statewide election to be held on March 29, 2025, and:

(1) Requires 2/3 votes of the legislature for new tax, increase existing tax, new exemption, exclusion, deduction, credit, or rebate; increase a deduction, credit or rebate; or repeal existing tax exemption;

(2) Freezes the sales and use tax exemption on food for home consumption as listed on 1/01/25;

(3) No sales/use tax on prescription drugs;

(4) Requires locals to tax retail, use, lease, rental, consumption, or storage of goods, services, and other products required by law;

(5) Replaces graduated income tax with a flat income tax;

(6) After 12/31/25, persons 65+ shall be entitled to an additional standard deduction (raising that deduction to $25,000);

(7) Caps the expenditure limit to 105% of preceding year’s limit unless changes made by 2/3 of legislature;

 (8) Beginning FY 26, Budget Stabilization Fund (BSF) deposits 15% of corporation income and franchise tax revenues, and 15% mineral revenues;
if BSF capped, deposits become nonrecurring SGF; no deposit if balance exceeds 7.5% previous year’s revenue receipts;

(9) Creates fund classes – permanent trust funds (no principal removed) and program funds (2/3 of legislature);

(10) Dissolves the Education Excellence Fund, LA Education Quality Trust Fund and LA Quality Education Support Fund, balances transferred to TRSL to pay off a portion of the UAL and provide permanent teacher salary increases; and

(11) Various other changes.

Passed Ways and Mean 12-2.  Awaits action by the Full House.

HB-8 (Levies taxes on certain digital products and services).

Was on 11/7/24 House Ways and Means agenda but was not considered nor has it been rescheduled for another Committee meeting to date.

 HB-9 (Levies sales and use tax on a broad spectrum of services not presently subject to the tax).

Here’s the list:

(1) Storage for boats and vessels of less than 50 tons load displacement and trailers.
(2) Auto club services and fees including road and travel services.
(3) Car wash services.
(4) Coin-operated machines or devices that dispense only services and not merchandise, music, skill, or pleasure.
(5) Installation, repair, and maintenance of taxable computer software, and related training.
(6) Condominium timeshare and exchange services.
(7) Dating and social matching services and marriage bureaus.
(8) Delivery, shipping, freight, and transportation services associated with a taxable sale of tangible personal property.
(9) Non-medical diet and weight reduction services including commercial weight loss services not prescribed by a healthcare provider.
(10) Immovable property repair, maintenance, and installation services (excluding new construction, reconstruction, and capital improvements as defined in proposed law).
(11) Information services as defined in proposed law.
(12) Interior decorating and design services.
(13) Intrastate limousine, bus, and van transportation services and taxi cab and rideshare services.
(14) Landscaping, lawn care, and horticulture services.
(15) Linen supply services.
(16) Lobbying services.
(17) Machine and equipment operator services provided with machine or equipment rental.
(18) Mailing services.
(19) Marina services provided with respect to boats and vessels of less than 50 tons load displacement.
(20) Personal fitness training services.
(21) Pet grooming, boarding, sitting, training, and obedience services.
(22) Photography and photographic studio services, including sitting fees.
(23) Photofinishing and film development services.
(24) Private process server services.
(25) Public opinion and research polling services.
(26) Quilting, embroidery, and monogramming services.
(27) Repairs, maintenance, and installation of tangible personal property.
(28) Repossession services.
(29) Restroom operations and comfort station services.
(30) Security services as defined in proposed law.
(31) Personal shopping services for individuals.
(32) Social event planning and coordination services and catering services.
(33) Spa services, massages by massage parlors, and steam baths.
(34) Rental of space for meetings, conventions, short-term business uses, entertainment events, weddings, banquets, parties, and other short-term social events.
(35) With certain exceptions as provided in proposed law, furnishing of space for storage of tangible personal property by a person engaged in the business of furnishing storage space.  (Expands present law on taxation of storage space which imposes sales tax only on the furnishing of cold storage.)
(36) Skin tanning services.
(37) Body modification services including tattooing, piercing, scarification, and branding.
(38) Travel and travel package services including services of travel agents and travel clubs.
(39) Except as prohibited by federal law, cable television services, direct-to-home satellite services, video programming services, and satellite digital audio radio services.
(40) Services provided through warranty agreements, extended warranty agreements, and service contracts.
(41) With certain exceptions as provided in proposed law, waste collection and disposal services (excluding public or private municipal waste management).
(42) Wrecking and towing services.

Has been referred to House Ways and Means Committee but has not yet been heard.  This bill constitutes one of the “bitter pills” (as characterized by at least one media outlet) of the tax reform package.

HB-10 (Makes 0.45% sales tax scheduled to expire on 6/30/25 permanent; repeals certain exemptions, rebates and credits presently applicable for sales and use taxes).

Was on 11/7/24 House Ways and Means agenda but was not considered nor has it been rescheduled for another Committee meeting to date.

As briefly mentioned, media outlets have indicated Landry’s plan is comprised of “sweeteners” and also “bitter pills.”

At this time, let’s present a table of the estimated five-year fiscal impact of the major components of Landry’s plan in order to illustrate why those are the characterizations being made.

[Note:  amounts in parenthesis ( ) represent negative impacts on the State’s finances, and numbers not in parenthesis represent positive impacts, i.e. increased revenue, on the State’s finances].

Here’s the table:

As we indicated in our prior feature, it has always been Sound Off Louisiana‘s policy to enable anyone to “sound off” on a Louisiana governmental issue of concern or interest to that person.

Accordingly, on Saturday, October 12, 2024, we were invited to a community meeting held by The Mixon Clayton Foundation in Hammond, Louisiana, which was founded by E. Rene’ Soule’ .

At that meeting, Dr. Lue Russell, Th.D. expressed opposition to one aspect of Gov. Landry’s tax reform package, specifically, Item # 10 of HB-9 outlined above.  Let’s present her commentary (i.e. allow her to “sound off”) at this time:

10/12/24:  Dr. Russell expresses her sentiments on one aspect of Gov. Landry’s tax reform package and places particular focus on expanding the sales tax to include home repairs.

We certainly understand Dr. Russell’s sentiments; however, let us point out just a couple of things:

#1) Dr. Russell is a real estate agent at Keller Williams and, oftentimes, as part of a traditional real estate contract (Sound Off Louisiana founder Robert Burns was a real estate broker and auctioneer of real estate for 10 years), the buyer often calls for certain repairs to be made by the seller as a condition of sale.  The alternative to paying the sales tax on such required repairs is to sell the property “as is, where is” (which is always done with auction) and avoid the tax.

We would suggest, however, that the buyer is likely to whop off more than the cost of the sales tax being imposed on those repairs, so the simple solution in our minds is to maintain a home during the entire time of ownership, and there should be no big-ticket surprise upon making efforts to sell that home.

#2)  Dr. Russell would appear to be focusing solely and exclusively upon the “bitter pill component” and ignoring completely the “sweetener” in HB-1, which is the complete and total elimination of the lowest tax bracket from being subject to ANY further income taxes in Louisiana!  As Gov. Landry emphasized in his Ways and Means testimony on 11/7/24, that provision of his package results in the lowest-income Louisiana citizens receiving, “the biggest tax cut and the most relief,” (see from 4:38 – 4:55 mark on the just-linked video).

Again, we’ve emphasized our unbridled and full-throttled support for Gov. Landry’s tax reform package, and we commend him on being the only Governor in the lifetime of Sound Off Louisiana founder Robert Burns who has shown the sheer guts to propose a measure this strong that will, in our firm opinion, springboard Louisiana into becoming a much more competitive state on attracting business wishing to expand here and, perhaps equally if not more importantly, plug the bleeding of people leaving Louisiana (especially to Texas) when it comes time to retire.  After all, when we lose those people, we lose ALL of the taxes they were paying as Louisiana residents (both sales and income taxes)!

We again extend our invitation to anyone wishing to do as Dr. Russell has done and express sentiments about Gov. Landry’s plan on our camera irrespective of whether we agree or disagree with those sentiments.

The House Ways and Means Committee will convene today (Sunday, 11/10/24) at 3:30 p.m. with the only two items on the agenda being continued discussion (and expected vote) of HB-2 along with initial consideration of HB-11 which would shift Louisiana’s $7,500 inventory tax exemption from its Constitution to Statute and also allow an additional local exemption provided sheriffs, school boards, and parish governing authorities all assent.

Our next planned update on Gov. Landry’s tax reform initiative is likely going to be Wednesday, after some (or all) of the “bitter pills” have been heard by the House Ways and Means Committee.