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HB 654

TAX/SALES & USE: Requires sales and use tax exemptions, exclusions, credits, or rebates to apply to both the state and local sales tax bases (EN SEE FISC NOTE GF RV See Note)

2025 Regular Session Introduced by Beau Beaullieu

Louisiana law now requires state sales tax exemptions to automatically apply to local sales taxes, potentially reducing local government revenue.

Signed by the Governor. Becomes Act No. 215.
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Bill Summary · HB 654

Legislative bill overview

HB 654 requires that any sales and use tax exemptions, exclusions, credits, or rebates granted at the state level must also automatically apply to local sales tax bases in Louisiana. Previously, state-level tax breaks did not necessarily extend to the local tax portion, creating a two-tiered system. This bill harmonizes the application across both tax levels.

Why is this important

This affects both taxpayers and local government revenues. Taxpayers who qualified for state tax exemptions may have still owed local sales taxes, reducing the intended benefit of state tax relief measures. Local governments rely on sales tax revenue for schools, infrastructure, and services, so this mandate changes their revenue calculations and may require budget adjustments.

Potential points of contention

  • Local government revenue loss: Municipalities and parishes losing local sales tax revenue from certain exemptions may struggle to fund services without identifying replacement revenue sources
  • Scope of exemptions: The bill applies broadly to all exemptions/credits/rebates, which could include high-value breaks (such as manufacturing equipment exemptions) that significantly impact local budgets
  • Implementation complexity: Local tax administrators must align their systems with state exemptions, requiring coordination and potential system updates across multiple jurisdictions

Compiled from official sources — confirm details with the bill’s official record.

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