A bill intended to limit a barely-used sales tax exemption for antique air crafts was dramatically changed by the Louisiana Senate to give the state's manufacturing industry a multi-million dollar tax exemption.
Sen. JP Morrell, D-New Orleans, chided the Senate for surreptitiously allowing the amendment to "hijack" what was initially intended to be a bill that would generate revenue for the state and turning it into vehicle for a massive business tax exemption that he said would cost the state $22 million a year as the Legislature struggles to balance the budget.
Morrell's Senate Bill 29 was intended to limit a sales tax and use exemption for antique air crafts so it only applied to those that assist with medical transport. The aircraft purchases are rare enough that the state Fiscal Office said it couldn't estimate what revenue would be generated by the change.
But on the Senate Floor on Monday, Sen. Barrow Peacock, R-Bossier City, proposed an amendment that added language to partially restore a sales tax exemption on manufacturing, equipment and machinery. The sales tax exemption was stripped last year, when the Legislature temporarily removed dozens of industry tax exemptions on the state sales taxes in an attempt to close a budget deficit.
Peacock said legislators had promised the manufacturing industry that their sales tax exemption would not be touched last year, and this was an attempt to make good on a broken promise.
"This will help us with jobs," he said. "It sends the right message."
The amendment passed 22 to 13. But because it dramatically changed the cost to the state, the bill was redirected to the Senate Finance committee for further vetting.
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Peacock attempted to add another similar rider, which would have further restored more of the industry's sales tax exemptions. That amendment was again strangely placed on another of Morrell's bills that aimed to reclassify how precious metal coins should be taxed.
Peacock authored a bill that would have reinstated the manufacturing tax exemption. But his Senate Bill 21 was stalled last month in committee.
Morrell said Peacock was trying to circumvent the system.
"Sen. Peacock had the opportunity to have his bill heard in committee," he said. "We have a committee structure for a purpose."
Peacock's second amendment was rejected by the Senate.
Peacock defended his actions.
"The floor is part of the process," he said. "I'm not doing anything that is beyond what we're allowed to do in the state."
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