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Jindal's tax plan could have big impact on car sales

Kenner, La. - Bruce Miller's favorite vehicle to sell is the Chevy Silverado.

"If you're an American, you need to buy a Silverado," he says with a laugh. "That's what we sell, trucks."

With a price tag of more than $30,000, the Silverado is no economy car, but it's the top seller at Best Chevrolet in Kenner. 

The price could go up even more if lawmakers approve Governor Bobby Jindal's tax reform plan.

The governor said Thursday he wanted to do away with personal and corporate income taxes, a proposal he says will make the state more competitive for business.  Much of the revenue would be made up with an increase in sales tax.

Jindal has not unveiled the details of his plan yet but some economists say the increase could be at least 1.6 percent or more.  That increase could push the sales tax in many parishes into the double digits.

"Mandeville is 9.25," says Miller. "In some parishes, it would go up to 11 percent.  That would be 11 percent sales tax on the purchase, which is a good amount.  And when we're selling a car, it would be another... the average price is $30,000, it would be another $500 that we'd have to account for on that purchase."

Bob Israel is president of the Louisiana Automobile Dealers Association.  He says other states have capped the sales tax on vehicle purchases, something Louisiana lawmakers should consider.

"The 9 percent is the highest automobile tax in the country, or one of the highest, so we're already, as far as cars are concerned, at one of the higher-type levels," he says.

Israel says it's too early to know exactly how sales tax may be impacted by the proposed reform, and he says there are other ways to generate revenue without putting more burden on people buying cars.

"There are many services that are not products that today are not taxed," says Israel. "That may be one of the ways that they are going to broaden the base."

Lawmakers will consider the governor's tax plan during their session in April.

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