Talk of inventory tax repeal concerns local governments

Talk of inventory tax repeal concerns local governments
(FOX 8 Photo)

NEW ORLEANS, LA (WVUE) - The inventory tax paid by businesses is generating a lot of discussion, and now local governments in the New Orleans area are concerned that they could be victims of attempts to help the state's fiscal picture.

Gov. Bobby Jindal's administration said the governor would support a repeal of the tax that is paid by businesses of all sizes.

"It's the snowball stand, they're paying inventory tax on their syrup," said St. Charles Parish Assessor Tab Troxler.

While the retail sector pays, the bulk of it is footed by the industrial sector.

"The majority of it is actually paid by large industry, and that comes in the form of inventories on oil, gas and petrochemicals," Troxler said.

And as the state looks to ease its money woes, the governor proposes scaling back the state tax credit for the inventory tax which is nearly $500 million. It's something the business community said would hinder new economic development.

"This is going to affect our efforts to expand industry and bring new industry in. The inventory tax credit is one of the leverages we use in competing with other states," said Henry Friloux of the River Region Chamber of Commerce.

"The way that works is local government assesses the amount of the inventory, that tax is paid to local governments, then business submits a bill to the state and the state refunds that amount," said Rep. Walt Leger.

The governor's staff said he would support a constitutional amendment to repeal the inventory tax. But that is not good news for local parish governments, which levy and collect millions of dollars from the tax.

"I would hope the state doesn't take the state fiscal crisis and turn that around and put that on parishes and then parishes would have a fiscal crisis," said Troxler.

Leger said that is a concern with merit.

"I certainly support looking for more revenue and looking at tax expenditures to find revenue to support Higher Ed and healthcare, but it's a concerning proposition when it comes to supporting our industry, our business, particularly our local governments," he said.

Here is a look at the revenues collected by local parish governments as a result of the inventory over the past two years.

The Jefferson Parish Assessor's Office said in 2013 the average inventory taxes paid was $30,033,406. For 2014 the amount was $32,237,539 in Jeferson.

For St. Charles Parish, the assessor's office said the 2013 amount was $31,696,804 and 2014 was $32,423,917. In neighboring St. John Parish, the parish received $21.5 million in 2012 and $22.4 million in 2014.

St. Bernard Parish said it collected a total of $12,884,951 in inventory taxes for 2014. On the north shore, the St. Tammany Parish assessor's office said it received $11,445,398.78 in 2013 and $13,463,258.18 in 2014.

Orleans Parish collected the least of the parishes surveyed. According to the mayor's office, the amount for 2013 was $11.369 million and for 2014 it was $10.661 million.

"We're talking about 22 percent of our total revenue is based upon the inventory tax," Troxler said..

"For some parishes you're some parishes you're talking about five to 10 percent of their revenues, for others you're talking about close to 50 percent of their revenue, so it's a big deal for local government who are things like public safety and infrastructure for their communities," said Leger.

The legislative session which will be dominated by budgetary issues begins in April.

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