Proposed end to inventory tax could impact Iberville
Legislation that would end the inventory tax credit as part of a tax reform plan could put the brakes on a significant revenue source for Iberville Parish.
If approved, it could mean $13 million less for Iberville alone, Assessor Randy Sexton said.
“For river parishes like this with a lot of industry, this bill would hit pretty hard,” he said. “It would definitely have an effect.”
Some states do not have an inventory tax, which may reflect the direction the state wants to pursue in the tax reform plan.
The impact would mainly fall on industrial parishes as Iberville, Ascension, West Baton Rouge and St. James.
While Iberville will feel a big brunt of the loss if the bill passes, the elimination could prove even harsher for St. James, which is still reeling from the shutdown of the Shell Refinery in Convent – a move which, alone, will trigger a $19 million revenue shortfall in that parish.
“And then they’ll get hit again for as much or probably more than we get in Iberville because they have a lot of tank values,” Sexton said.
Those who favor an end to the inventory tax believe it would make Louisiana more business friendly. Louisiana is one of only 10 states with an inventory tax
Louisiana ranks No. 3 in the nation for imposing state and local taxes on business inputs, and No. 1 for the sales tax rates.
Gov. John Bel Edwards, meanwhile, has said that any bills passed as part of a tax reform measure must be revenue neutral to prevent the same type of fiscal cliff Louisiana endured when he inherited a $900 million shortfall from Gov. Bobby Jindal.
He has also cautioned lawmakers that the remaining one percent of a penny on the state sales tax will expire in 2026.
While the loss in inventory tax would be tough for Iberville, the robust expansion during the past several years would give the parish enough financial padding to significantly ease the brunt from the loss.
The forthcoming expansion of a 10-year tax exemption at Shintech and the ongoing industrial growth throughout the parish would likely cover the shortfall from an end of the inventory tax.
Sexton certainly does not think an end of the inventory tax would trigger immediate doom and gloom for Iberville Parish.
“Don’t get me wrong … there are a lot of things Iberville Parish still needs, such as a bridge,” he said. “But we are in great shape, Iberville is standing on its own and doesn’t need a whole lot of state assistance for projects these days.”