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Tax Items Could Be Addressed in Louisiana Special Session 

Posted on Sep. 23, 2020

Business tax incentives and unemployment taxes are among the issues that could be addressed during a special session called by the Louisiana Legislature to primarily tackle issues related to the COVID-19 pandemic, Hurricane Laura, and the state’s unemployment trust fund. 

The Legislature announced on September 21 that state lawmakers had called for the special session, which will begin on September 28 and end on October 27.

The state constitution gives the Legislature the ability to call itself into special session with a written petition of the majority of elected members in each chamber. This will be the second time the Legislature has done so this year. 

The special session will be limited to the 70 items listed in the proclamation. Legislators can introduce legislation related to “tax credits, incentives, rebates, exclusions, exemptions, deferments, and abatements to provide relief during declared states of emergency and disaster.”

Unemployment taxes, surtaxes, and assessments can also be addressed.

State officials have warned that the state unemployment insurance trust fund is at risk of becoming insolvent. During an August 6 press briefing, Gov. John Bel Edwards (D) said that the fund had about $1.1 billion at the beginning of March.

The fund's balance was approximately $72.18 million as of September 21, Frededreia “Dede” Dunham of the Louisiana Workforce Commission told Tax Notes

If the fund reaches a certain threshold, taxes on employers will automatically increase. In a July 23 letter to Louisiana’s congressional delegation, Bel Edwards requested federal assistance so the state can avoid the tax increase and continue paying unemployment benefits. 

Other tax-related items listed in the proclamation include the distribution or allocation of the hotel and motel occupancy tax proceeds for Jefferson Parish, severance taxes related to some agricultural and timber products because of a declared state of emergency or disaster, state sales and use tax exclusions for some re-leases or re-rentals of items of tangible personal property, business tax incentives, and the taxing authority for economic development districts. 

Meanwhile, the governor expressed concern about the special session, saying in a September 21 release that it “will occur at a time when the public will again be restricted in their access to the State Capitol and their ability to give needed public input.”

The governor said he is “hopeful that the legislative leadership will significantly narrow the scope and the duration of this session so that they can do the work they deem necessary, while at the same time working in a bipartisan and cooperative manner to address our significant challenges in an honest and transparent manner. Louisianans have come too far to have all of our effective and life-saving work upended.”

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