In a continuation of the recent surge in unconstitutional state Internet tax legislation, the Louisiana House of Representatives passed a bill on Monday (HB 641) that would re-categorize out-of-state companies as in-state, forcing them to collect taxes should they invest in the state or contract with in-state affiliates. The bill passed in a 78-14 vote and is currently being reviewed by the Senate Committee on Revenue and Fiscal Affairs.
As has been seen in other states
with similar legislation, Internet taxes do very little to generate new revenue streams for struggling states. Under the guise of helping local small businesses, Internet taxes do more to kill jobs than create new ones. Rhode Island recently enacted an Internet tax which has since caused major fiscal and employment issues in the state. Rhode Island General Treasurer Frank T. Caprio recently called
for the repeal of this tax:
“The affiliate tax has hurt Rhode Island businesses and stifled their growth, as they’ve been shut out of some of the world’s largest marketplaces, and should be repealed immediately.”
Internet taxes not only harm in-state businesses, but cause online companies to invest in states that have not put similar taxes into law. If HB 641 is passed in Louisiana, the fate of the state’s economic situation will be no different; successful companies that would otherwise bring jobs and income to struggling cities will choose to invest elsewhere.
It is of utmost importance that the progression of this legislation is stopped. If passed, it will produce extremely detrimental effects on the state economy and the citizens of the Louisiana.
ATR recently sent a letter to the Louisiana state legislature and Governor Jindal regarding this very issue. For a PDF of this letter, click here