WPBN: Beginning on January 1st, residents of Louisiana will be subject to a hike in the sales tax, which will lead to it becoming the highest in the US.
This modification, which is a component of a new law that was approved during the most recent special legislative session, will have an impact on the prices of some services and items across the state.
It is anticipated that the state’s sales tax, which is now at 4.45%, will increase to 5%, bringing the total amount of state and municipal sales taxes on goods to approximately 12%.
An example of this would be a consumer paying an additional $1 in tax on a purchase of $10, which would result in the total cost being $11.
It was approved by Governor Jeff Landry that the tax revamp, which is intended to bring in greater money for the state, shall be implemented. On the other hand, proprietors of local businesses are worried about the effect that the increase would have on their respective bottom lines.
Club Tan, which is located in Lafayette, is owned by Erin Landry, who is concerned that the increased tax will be detrimental to businesses such as hers, particularly because many of the products that are sold, such as tanning lotions and other products, are more expensive.
The statement made by Landry was that “people are so strapped for cash right now,” and that any more charges that we bring on could potentially slash into our bottom line. According to Allie Guidry, a local server, who works in the restaurant sector, she is concerned that the hike in the sales tax may discourage spending, particularly when it comes to tipping.
“It’s already expensive, and you already have to tip on top of that. If people start pinching pennies and cutting back on tips, this will affect everybody,” Guidry stated. “I’ve already noticed the strain. I went grocery shopping and noticed it was $15 more than what it should have been.”
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Particularly concerning for Guidry and other workers in the service industry is the possibility that the additional financial burden could lead to a reduction in the number of clients who dine out or leave lesser tips, which would further damage salaries that are already low.
According to the new legislation, the rate of sales tax will continue to be 5% for the next five years, after which it will progressively decrease to 4.75 percent.
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