Facing pushback on the new business tax he's proposing, Gov. John Bel Edwards is tweaking the idea in hopes of shrinking criticism that it would hit some companies too hard.
To help replace $1.3 billion in temporary, mainly sales taxes — money that is set to expire in mid-2018 — while also raising more money, Edwards wants to levy a new tax on a business's gross receipts, which the administration is calling a Commercial Activity Tax.
As the Democratic governor described the measure to lawmakers Monday, the concept already had been changed from how it was originally explained less than two weeks ago, by adding new carve-outs for certain types of businesses.
Revenue Secretary Kimberly Robinson said the changes were based on feedback "from business conversations around the state and ... from legislators who just want to make sure they understand and that we are not creating an undue tax burden on businesses around the state."
As originally explained, the 0.35 percent tax on sales would be charged on businesses with more than $1.5 million in gross receipts annually, which the Edwards administration estimates is 6 percent of Louisiana's companies. Other businesses would be assessed a flat tax from $250 to $750.
The new proposal would have different formulas for companies that file taxes through individual income taxpayer forms and for high-volume businesses with low profit margins, such as grocery stores. For example, rather than paying a percentage tax, companies that file individual income taxes would pay a flat tax that ranges from $1,500 to $12,500, depending on their gross receipts, if they reach the $1.5 million threshold.
The tax was estimated to raise up to $900 million annually before the changes. That's expected to drop, but it wasn't immediately clear by how much.
"I'm hoping that this is not a significant hit," Robinson said.
The gross receipts tax proposal, reflecting the changes, will be filed this week, she said.
Several lawmakers have said it's difficult to study the concept without being able to see legislation or a financial analysis of it.