BATON ROUGE, La. (WAFB) - Governor Jeff Landry's plan to cut corporate and personal income taxes means adding new taxes to 41 everyday services. Some lawmakers are concerned about a rise in prices and insurance premiums. Lobbyists for the insurance industry in Louisiana made their case today, saying that with higher costs for things like home repairs, insurance premiums will follow suit.
"This is just facts; we simply react to the laws on the books. It will simply be more money that is paid out on the claim and when you pay more in taxes, that's less money that goes into the actual repair, because a lot of folks will probably have the same coverage but it reduces the amount of money they have to actually pay for what's broken."
What makes the cost for you at home hard to figure out is that in the bill there is an exemption for remodeling or 'capital improvements'; meaning if you had to fix your roof and windows, the remodeling would be tax exempt. However, if you just had to do a simple repair, that would be taxed, leaving the business owner to do the math. This was a big concern today for House Democrat Representative Mandie Landry.
"How much do they have to pay an accountant to do this?" Landry said.
"How much extra time will it take for them to do this and say is that a repair, is that a capital improvement? What's that, what's that? I think we need to hear from people like that."
HB 9 makes 41 so-called everyday services taxable as long as the business providing that service makes more than $10,000 a year. For large contracts and professional services like an accountant or lawyer, those remain untouched.
In defense of the bill, Secretary of the Department of Revenue, Richard Nelson said the benefits outweigh the costs here.
"This money that is raised from this would exempt prescription drugs," Nelson said. "Prescription drugs are taxed in Louisiana, not taxed in any other state, this is the revenue that offsets that."
He said it's all about expanding the base of people who pay these sales taxes; giving way for tax cuts for personal and corporate income. Some House Democrats are concerned that the price tag would fall on people who are already strapped for cash.
The list of services includes:
(1) Storage for boats and vessels of less than 50 tons load displacement and trailers.
(2) Auto club services and fees including road and travel services.
(3) Car wash services.
(4) Coin-operated machines or devices that dispense only services and not merchandise, music, skill, or pleasure.
(5) Installation, repair, and maintenance of taxable computer software, and related training.
(6) Condominium timeshare and exchange services.
(7) Dating and social matching services and marriage bureaus.
(8) Delivery, shipping, freight, and transportation services associated with a taxable sale of tangible personal property.
(9) Non-medical diet and weight reduction services including commercial weight loss services not prescribed by a healthcare provider.
(10) Immovable property repair, maintenance, and installation services specified in the proposed law (excluding new construction, reconstruction, and capital improvements as defined in the proposed law).
(11) Information services as defined in proposed law.
(12) Interior decorating and design services.
(13) Intrastate limousine, bus, and van transportation services and taxi cab and rideshare services.
(14) Landscaping, lawn care, and horticulture services.
(17) Machine and equipment operator services provided with machine or equipment rental.
(18) Mailing services.
(19) Marina services provided with respect to boats and vessels of less than 50 tons load displacement.
(20) Personal fitness training services.
(21) Pet grooming, boarding, sitting, training, and obedience services.
(22) Photography and photographic studio services, including sitting fees.
(26) Quilting, embroidery, and monogramming services.
(27) Repairs, maintenance, and installation of tangible personal property.
(28) Repossession services.
(29) Restroom operations and comfort station services.
(32) Social event planning and coordination services and catering services.
(33) Spa services, massages by massage parlors, and steam baths.
(34) Rental of space for meetings, conventions, short-term business uses, entertainment events, weddings, banquets, parties, and other short-term social events.
(35) With certain exceptions as provided in the proposed law, furnishing of space for storage of tangible personal property by a person engaged in the business of furnishing storage space. (Expands present law on taxation of storage space which imposes sales tax only on the furnishing of cold storage.)
(36) Skin tanning services.
(37) Body modification services including tattooing, piercing, scarification, and branding.
(38) Travel and travel package services including services of travel agents and travel clubs.
(39) Cable television services, direct-to-home satellite services, video programming services, and satellite digital audio radio services.
(40) Warranty agreements, extended warranty agreements, and service contracts.
(41) With certain exceptions as provided in the proposed law, waste collection and disposal services (excluding public or private municipal waste management)