The state Senate is killing the extension of a tax break sought by business groups that would have cost taxpayers $200 million over three years.
That means the long-standing inventory tax credit will expire in 2026 as previously approved.
Senate President Cameron Henry, R-Metairie, and Gov. Jeff Landry’s administration said extending the tax break a year was too expensive.
Rep. Ken Brass, D-Vacherie, sponsored the one-year extension, House Bill 383, which passed the House 98-4.
Pushing for the extension were the Louisiana Association of Business and Industry, the Louisiana Chemical Association and the Louisiana Mid-Continent Oil and Gas Association.
Created in the early 1990s under then-Gov. Buddy Roemer, the inventory tax credit aimed to assist businesses that paid the inventory tax.
The tax and tax credit work in a convoluted fashion. Under the current system, parishes levy a property tax every year on business inventory in the parish. Businesses pay the tax but then turn around and receive a tax credit for that payment from the state.
As a part of a wholesale revision of the tax code in November, legislators and Landry repealed the inventory tax credit as of July 1, 2026. But that was supposed to happen in conjunction with passage of a proposed constitutional amendment that, among other changes, would give each parish the right to opt out of the tax in exchange for up to $15 million to make up for the lost property tax revenue.
Voters rejected that proposed change in March as part of the sweeping Amendment 2.
Through House Bill 365 and House Bill 366, the Legislature is set to give voters another chance to vote on the single issue of letting parishes eliminate the inventory tax. The bills, sponsored by Rep. Daryl Deshotel, R-Hessmer, are one step from winning legislative approval to be put on the statewide ballot in November 2026.
If voters approve the constitutional amendment, the Landry administration believes that about 40 of Louisiana’s 64 parishes would repeal their inventory tax.
The Senate’s refusal to keep alive the inventory tax credit is the latest instance where the upper chamber, because of concerns about the hit to the state treasury, has refused to go along with the House.
Senators also failed to advance House-passed cuts in the state sales and individual income tax, and they decided to spend half of what the House and Landry wanted to spend on LA GATOR, the program that gives parents taxpayer money to pay for private schools and other expenses.
