HB 666 would lower several Louisiana income tax rates and expand the state sales and use tax base to a broad set of services. Specifically, it reduces the individual income tax rate from 3.0% to 2.9%, the corporate income tax rate from 5.5% to 5.4%, and the estate and trust income tax rate from 3.0% to 2.9%, with the changes taking effect for taxable periods beginning on or after January 1, 2026. The bill also creates a new Local Revenue Fund in the state treasury to receive dedicated revenue from the new service taxes and to distribute those monies to parish ad valorem tax recipient bodies to help offset losses tied to business inventory exemptions.
The bill would impose an additional 5% state sales and use tax on a long list of services that are newly made taxable, including telecommunications-related services, lodging accommodations for transient guests, admissions and entertainment, parking, printing and copying, laundry and cleaning, repairs and maintenance of tangible personal property, software access services, information services, cleaning/detailing, dating and social matching, vehicle transportation including rideshare, lobbying and consulting, photography, embroidery, security services, spa services, tanning and body modification, and travel services. For these newly taxable services, local sales taxes would be prohibited, so the state tax would apply in lieu of parish or municipal sales taxes. The Department of Revenue would administer and collect the tax, and the bill includes a limited penalty waiver for the first six months of implementation for certain reporting or collection failures related to services that were not previously taxable.
In terms of state law, HB 666 would amend existing income tax provisions and sales tax statutes, add a new special fund in Title 39, and expand the statutory definition of taxable services in Louisiana. It would also shift revenue collection and distribution by dedicating the new service-tax receipts to the Local Revenue Fund rather than to general local sales tax collections, while preserving the state’s authority to collect the tax directly. The bill’s effective date is January 1, 2026.
Because there are no committee transcripts or recorded votes provided, there is no documented floor or committee sentiment to assess from the available context. Based on the bill text alone, the measure appears to combine a modest income-tax reduction with a significant broadening of the sales-tax base, suggesting a revenue-neutral or revenue-rebalancing approach rather than a pure tax cut. The absence of recorded discussion means no specific support or opposition arguments are available in the provided materials.
The main points of potential contention are likely the expansion of sales tax to services that are currently untaxed or taxed only by the state, the prohibition on local sales taxes for those services, and the inclusion of politically sensitive categories such as lobbying, rideshare, security, spa, travel, and personal services. Businesses and consumers in the newly taxed sectors may oppose the added tax burden, while local governments and ad valorem tax recipient bodies may focus on whether the Local Revenue Fund adequately offsets lost revenue and how the new revenue will be distributed.
HB 666 would amend Louisiana’s individual, corporate, estate, and trust income tax rates and substantially expand the state sales and use tax base to include numerous services. It would also create the Local Revenue Fund in the state treasury and dedicate certain service-tax revenues to offset parish-level ad valorem tax losses associated with business inventory exemptions. The bill would preempt local sales taxes on the newly taxable services, centralize collection in the Department of Revenue, and provide a temporary penalty waiver during the initial implementation period.
No committee debate or vote history is provided, so there is no direct evidence of legislative sentiment from the available record. The bill’s structure suggests a mixed policy approach: supporters would likely view it as a tax-rate reduction paired with a broader, more modern sales-tax base, while opponents would likely focus on the new taxes on services and the loss of local taxing authority. Overall, the available materials do not show recorded support or opposition, only the bill’s policy design.
The most likely areas of contention are the new 5% state sales tax on a wide range of services, the prohibition on local sales taxes for those services, and the inclusion of services such as lobbying, rideshare, travel, spa, security, and personal care. Local governments may be concerned about preemption of their taxing authority, while affected industries may object to being newly taxed. Another likely issue is whether the Local Revenue Fund sufficiently compensates parish ad valorem tax recipients for inventory-exemption-related losses and whether the revenue shift is equitable across parishes.