La. sales, cigarette and alcohol tax hikes kick in Friday
BATON ROUGE - Smokers, drinkers, car renters and every shopper around Louisiana will be paying more for their purchases beginning Friday.
Tax hikes on cigarettes, alcohol and car rentals are among many tax changes that take hold April 1.
The biggest tax increase will hit nearly every person and business. The 1 percent increase in the state sales tax will boost Louisiana's average state and local sales tax rate to more than 10 percent, the highest in the nation, according to the Tax Foundation.
In addition, a long list of purchases usually free from state sales tax will temporarily lose some of those exemptions.
The owner of Pam's Capitol Corner Market in Baton Rouge, Pam Robertson says the tax increase will impact her profits. "I have to sale six cartons in order buy one carton clear" the store owner said.
The cigarette tax increase is expected to generate 46-millon dollars a year, to help the state reduce it's budget deficit and smokers are not happy with that cost being passed on to them.
Laura Borgelon of Baton Rouge is a smoker for 35-years and she said "We enjoy our cigartettes and it's going to put a strain on everyone who does smoke." The $1.08 tax is still less than the average state tax accoss the country of $1.61 on a pack of cigarettes.
The cigarette tax isn't the only increase. Sales taxes increases by a penny on the dollar. Taxes will go up on alcohol as well. Lawmakers upped taxes in a special session last month in order to balance the state budget. It was almost one-billion dollars short for the current fiscal year and two billion short for next year.
Lawmakers passed the tax increases to help balance Louisiana's budget. They are estimated to raise $300 million by June 30 - and much more for next year's budget.
A breakdown of the taxes are below:
- Increasing the state sales tax from four cents to five cents; the extra penny remains in effect until June 30, 2018, in most cases, but expires on July 1, 2016, for manufacturing equipment and machinery
- Most current exemptions and exclusions on the 4 percent state sales tax are eliminated; all exclusions will be restored by July 1, 2018
- An automobile rental tax, which had expired, is reinstated on gross proceeds at the rate of 2.5 percent (state) and 0.5 percent (local)
- A hotel tax, with revenue flowing to local governments, is expanded to include residential locations such as houses, apartments and condominiums
- Sales made in Louisiana by dealers outside the state (such as over the Internet) are subject to the collection and remittance of sales and use tax
- The excise tax on cigarettes increases to $1.08
The excise tax on alcoholic beverages increases to:
- Liquor - $0.80 per liter
- Sparkling wine - $0.55 per liter
- Still wines with 14-24 percent alcoholic volume - $0.35 per liter
- Still wines with more than 24 percent alcoholic volume - $0.55 per liter
- Malt beverages - $12.50 per barrel
- Low alcoholic content beverages - $12.50 per barrel