Legislators heard pitches Friday to preserve tax breaks for truckers, tourists and patients.
The Revenue Study Commission is combing through the myriad of state tax exemptions that reduce state government revenue.
The review comes as the state struggles to pay for health care and other public services. The state’s tax code is expected to dominate next year’s legislative session.
Cathy Gautreaux, executive director of the Louisiana Motor Transport Association, said a sales tax exemption on the books since 1996 benefits the entire trucking industry.
Louisiana allows trucks weighing at least 26,000 pounds and trailers to be purchased free of state taxes if they are going to be used at least 80 percent of the time for interstate commerce. The exemption is expected to divert $10 million from state government in the state budget year that began July 1.
Gautreaux said truckers already are faced with increased costs because of federal mandates. She said the exemption allows companies, especially smaller carriers, to compete.
“We’d lose our carriers to other states,” she said.
Gautreaux said New Jersey got rid of a similar sales tax exemption and resurrected it months later.
Bob Israel, president of the Louisiana Automobile Dealers Association, said companies would pay $7,000 to $10,000 more for their trucks in Louisiana without the exemption.
He said an elimination of the tax break would cause companies to buy trucks in other states. “There’s no reason not to continue this,” Israel said.
State Rep. Jim Fannin, D-Jonesboro, said the exemption benefits a range of businesses, from a single trucker to a company with 1,000 trucks. “The small guy can have the same advantage as the large guy,” he said.
Fannin said the exemption benefits the state by generating jobs.
A similar argument was made for the Louisiana Tax Free Shopping Program, which is aimed at international tourists. Merchants who pay $100 a year can offer those tourists refunds on sales taxes. During the fiscal year that ended June 30, 2011, $1.1 million in sales taxes were refunded.
The program’s director, Denise Thevenot, said Louisiana needs to stay competitive.
She said a study concluded that international visitors generate $1.80 in revenue for every $1 in taxes refunded.
Thevenot said tourists shop in stores that participate and then submit vouchers that are redeemed for cash. She said the program applies to everything from apparel to electronics.
In 2002, Louisiana voters approved a constitutional amendment exempting prescription drugs from state sales taxes. Drugs dispensed at hospitals also are state tax-free.
The exemption reduces state government revenue by more than $200 million a year.
Lobbyist Randal Johnson told the study commission that all states exempt prescription purchases although Louisiana allows a local tax.
On another exemption, the commission agreed to consider cleaning up language in state law.
Repairs on immovable cable television equipment are nontaxable in Louisiana.
The problem, said Jason Decuir, an attorney for the state Revenue Department, is that cable television equipment these days is movable, giving as an example a cable box.
State Rep. Joel Robideaux, R-Lafayette, said he would make a note to look at reviewing the language.
“This exercise is good for us,” Decuir said.