Personal income tax reduced, Business rates are addressed
By KEVIN CHIRI
Slidell news bureau
SLIDELL – New Louisiana Gov. Jeff Landry came through on a major campaign promise when the state Legislature met last year, and the results of that effort will be felt immediately by St. Tammany Parish residents.
State political leaders in Louisiana have been talking for years about the need for major tax reform. To a person, the tax code in our state—especially as it affects business—is the reason Louisiana is the only southern state that continues to lose population.
Louisiana Secretary of Revenue Richard Nelson, who lives in St. Tammany, was the guest speaker at the East St. Tammany Business Alliance luncheon recently and brought the details of the 2024 legislative session to the business crowd, making it crystal clear that better days should be ahead for both individuals and business.
“This was just a start to reform our tax code,” said Nelson. “The changes we made in the first legislative session under Gov. Landry immediately made us a much more competitive state to attract businesses. We used to be ranked 40th and now we are ranked 25th.”
On a personal front, the personal income tax bracket for residents was reduced from 4.25 percent to 3 percent, while seniors 65-and-over had their standard deduction nearly tripled from $4,500 to $12,500, meaning seniors will pay less income tax if they still work.
On the business front, major changes were made to entice corporations to consider Louisiana. The corporate tax rate used to be 7.5 percent, which ranked Louisiana among the highest three in the nation—even higher than New York, Nelson noted.
The corporate tax rate was reduced to 5.5 percent and it immediately showed positive results as Meta, the parent company of Facebook and Instagram, announced they have chosen Louisiana to build a $10 billion artificial intelligence (AI) data center in northeast Louisiana. The four million-square-foot facility would be Meta’s largest worldwide, among more than 20 Meta data centers.
“Meta would have never come to Louisiana without our tax changes,” Nelson said, noting the state will receive around $30 million a year just from the utility tax. “And I believe it is only the first announcement of that kind we will be seeing in the future. I just talked to a business owner from Oregon, and he said that due to the change in our tax policies, he is considering moving his company here—something we are hearing from more-and-more business owners now.
“I’m looking forward to the day we hear parents in Houston or Washington say, ‘we are moving to Louisiana due to the job my kid is going to get there,’” he added.
The business climate for the state has been so bad that the annual loss of population has caused the state to also lose representation in Congress. Since U.S. senators and representatives are added or reduced for every state due to population, Louisiana lost a seat in Congress in 1990, then again in 2010, while Texas has gained 10 million people in population over the last 10 years and continues to add seats.
“We can’t control a lot of things, but we can control our taxes,” Nelson stated. “Looking at how we handled our tax code for many years going back, any intelligent person would have to be cynical of politics in our state to just leave things as they were.”
Nelson also said the Legislature took on a big reason the tax policy was so bad, which was so many special corporate tax incentives for businesses. There were 92 exemptions for business, and 33 corporate exemptions, eliminated in the session as well.
The big issue still on the agenda for Landry and the Legislature is to eventually get rid of state income tax entirely, something neighboring states have done as a way to draw people to their state.
“States like Florida and Texas have no income tax or very low-income tax,” he said. “Our goal is to slowly get rid of it, hopefully no later than 2030.”
While the tax changes were critical to draw Meta to Louisiana, Nelson said he expects St. Tammany Parish also see a similar benefit.
“St. Tammany has such attractive benefits for businesses to come here. I can see white collar businesses, like a Meta, picking this area to relocate now that the tax code is so much better,” he said. “I’m very optimistic the future in our state is changing for the better, especially since what happened last year in the Legislature was just the first step.”
Landry also signed legislation that repealed the corporate franchise tax, another positive move to help businesses in the state, however, to pay for some of the changes the Legislature agreed to a half-cent sales tax increase statewide.
Comments are closed.