Expanding Louisiana’s Sales Tax Raises $141M in Revenue

Expanding Louisiana’s Sales Tax Raises $141M in Revenue

The Louisiana Budget Project has released a new paper that discusses expanding the services that are subject to Louisiana’s 4 percent tax. Louisiana’s sales tax does not apply to personal services such as cable television, gardening services and landscaping, pet services, haircuts and music downloads. Today, personal services are among the fastest-growing areas of consumption. Updating Louisiana’s state sales tax to include personal services would raise additional revenue to protect critical services such as education and healthcare.

According to an analysis by the Institute on Taxation and Economic Policy, Louisiana would generate over $141 million in additional revenue if it modernized its sales tax to include personal services.

Increasing this sales tax would be an “equal opportunity” tax; Louisianans of all income levels would pay a portion of the increase. Although everyone would pay some, no one would pay a lot.

The full report is here.