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Tax Foundation: Edwards’ commercial activity tax proposal is a ‘nightmare’

April 20, 2017
By Elizabeth Crisp
Originally Posted on The Advocate

Gov. John Bel Edwards' complicated commercial activity tax proposal was already expected to face a difficult battle at the State Capitol this session.

A new analysis from the non-partisan Tax Foundation probably won't help it win many fans.

In a new blog post, economist Nicole Kaeding attempts to untangle the "incredibly complex tax structure laid out under this proposal" but concludes "This plan is a nightmare."

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Edwards, a Democrat, had proposed the idea as a way to shore up the state's budget and lower the sales tax to the level before he took office. He said other ideas in the past had failed to gain much traction so he looked to states like Ohio that have implemented gross receipts taxes, which are taxes on transactions.

"We want something that works, and we can't pass something that people don't understand," Edwards told The Advocate editorial board last week.

Edwards' office didn't immediately respond for a request for comment on the Tax Foundation's new analysis.

The Foundation's conclusion on the proposal:"It will add significant compliance costs to the state’s tax code, while retaining all of the flaws of Louisiana’s corporate income tax. The way to fix Louisiana’s corporate income tax isn’t to make it more complicated by adding multiple new layers of tax to it."