Over a two-fiscal-year period—from July 1, 2016, to June 30, 2018—companies doing business in Louisiana saw the nation’s greatest annual increase in business taxes, with state and local business taxes rising at a 12.5% clip to an estimated $10.1 billion annually.
In a report released today, research conducted by Ernst & Young along with the Council On State Taxation and State Tax Research Institute found the rate at which Louisiana business tax collections grew was not only significantly higher than the 2% national average but was also well above the 4.9% growth rate of Florida, next-highest Southern state.
The Louisiana Association of Business and Industry says the state’s hefty business tax burden can be traced back to more than two dozen permanent state laws passed since 2016 that ultimately raise business tax collections by some $3 billion. A handful of temporary tax changes have also come and gone during the three-year period.
“Louisiana’s complex tax structure has faced continuous change in recent years,” says LABI Senior Vice President Camille Conaway in a prepared statement. “Income taxes, franchise taxes, sales taxes, and property taxes—no element of the Louisiana business tax code has been left untouched since 2015 in an effort to boost collections. And still, the tax code is arguably the most complicated it has ever been.”
LABI President and CEO Stephen Waguespack took it a step further, saying the additional $3 billion in state taxes over three years have contributed to Louisiana’s lagging unemployment rate, economy and workforce participation levels.
“Our elected leaders should stop relying on increased government taxes, spending, mandates and lawsuits as the best way to provide improved economic opportunities for our people,” he says. “The data clearly shows that approach is not working.”