Louisiana senators Sunday reworked the state sales tax increase that is the linchpin of rebalancing this year’s budget, deciding to keep the tax on the books for five years, rather than the 18 months sought by the House.
The Senate Revenue and Fiscal Affairs Committee quickly changed the sales tax expiration date before voting 10-1 to advance the proposal to the full Senate for consideration.
The state sales tax would grow from 4 cents on the dollar to 5 cents, starting April 1.
That would boost Louisiana’s average combined state and local sales tax rate, which currently sits at more than 9 percent, to the highest in the nation, according to the Tax Foundation.
It also would generate money quickly – and in large amounts – to help fill gaps in the state’s budget, which must be rebalanced by June 30. Estimates are that the sales tax would raise more than $210 million for this year’s budget and nearly $880 million for a full year.