How does Louisiana's sales tax rate compare to other states?

How does Louisiana's sales tax rate compare to other states?

After a Tuesday news conference, citizens and state lawmakers began digesting the tax proposals put forth by Gov. John Bel Edwards to deal with the state's budget crisis.

One of the proposals would add a penny to the state's existing 4-cent sales tax.

"Of course, nobody ever wants to pay more for anything, but I think it might be something that has to be done. It's not a whole lot, I think I can afford it," said Lucian Peters, a taxpayer living in New Orleans.

According to the Tax Foundation, a tax policy research organization, 48 states collect sales taxes. And the five states with the highest average combined state-local sales taxes are Tennessee at 9.45 percent, Arkansas at 9.26 percent, Alabama and Louisiana, both at 8.91 percent, and Washington at 8.89.

Some local taxpayers do not want any increase.

"Because it's putting more money on people, and we should not," said Abdul Turk.

State Rep. Julie Stokes, R-Kenner, is a certified public accountant who sits on the House Ways and Means Committee which has a lot to say about tax legislation.

"We have the third-highest rate in the United States," she said. "It's not the best thing to have to do for sure, and I don't love it. I'm not sure we have an escape hatch from it, though, because there are so few ways to generate revenue quickly."

State Sen. Wesley Bishop, D-New Orleans, said most options at this point are not ideal, but the budget crisis needs to be resolved.

"If we don't make some tough decisions now in moving forward, we're going to have tougher decisions down the road," Bishop said.

Last year, the legislature raised the state's tobacco tax to 86 cents for a pack of cigarettes. Gov. Edwards proposes an increase to $1.08 per pack.

"Well, a smoker, no matter what, he's going to keep smoking even if they put it up to $10," said Shukri Kannish, who was holding a cigarette as he spoke.
"I'm going to keep smoking."

Longer term, the governor also wants voters to weigh in on whether it's time to eliminate the federal income tax deduction on state tax returns in exchange for lower individual and corporate tax rates.

"To do away with the federal income tax deduction makes sense. There's only three states in the United States that have that deduction in full: us, Alabama and Iowa," said Stokes.

The governor also wants some statutorily dedicated funds to be examined as he looks for ways to close more holes in the state budget.

Stokes addressed the New Orleans Chamber of Commerce about the proposals, saying she is concerned about dedicated tax dollars that benefit convention and visitor bureaus.

"I will be an advocate of making sure that does not get taken away from them," she said.

Stokes also said now is an appropriate time to dip into the state's rainy day fund, something else the new governor has proposed.

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