Treasurer Disappointed with Governor’s Veto of Bill to Eliminate Business Utility Sales Tax

Kennedy Says Louisiana Cannot Tax Its Way into Booming Economy

BATON ROUGE, LA – State Treasurer John Kennedy announced today he is disappointed with the Governor’s decision to veto legislation that would have provided a utility sales tax break for Louisiana businesses.

“One of the reasons Louisiana lost the steel mill to Alabama was the high cost of energy in our state,” said Treasurer Kennedy. “Helping to relieve the tax burden on businesses is a no-brainer, but the Administration obviously didn’t feel the same way. Is it any wonder Louisiana is 49th out of 50 states on the Forbes list of Best States for Business? ”

HB 505 by Rep. Cedric Richmond would have eliminated the 1 percent sales tax on utilities for businesses that use electricity, steam and water. It is estimated the tax costs Louisiana companies more than $68 million each year. One reason the Governor cited for vetoing the bill was the utility tax exemption would create a “significant revenue loss for the state.”

“The Legislature just passed a $32 billion budget, $3 billion of which was from surplus funds,” said Treasurer Kennedy. “We couldn’t make room to lighten the tax load on businesses? We must set priorities in this state if we are going to create the best environment possible for businesses to grow. Louisiana cannot tax its way into a booming economy.”

In addition to cutting utility taxes on businesses, HB 505 would have given tax incentives to manufacturers wanting to expand in the New Orleans area.

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