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Committee advances bill exempting prescriptions and insulin from local sales taxes after contentious hearing
Summary
House Bill 606, which would exempt prescription drugs and insulin from local sales and use taxes, passed the House Ways and Means Committee by roll call after extensive public testimony and local-government opposition citing large local revenue losses.
The House Ways and Means Committee voted 9–5 to report House Bill 606, sponsored by Representative Turner, which would exempt prescription drugs and insulin from local sales and use taxes. The measure drew extensive testimony from pharmacy owners, industry groups, municipal officials and local tax administrators and prompted a recorded roll-call vote.
Representative Turner described the operational challenge facing independent pharmacies: when insurers and pharmacy benefit managers (PBMs) reimburse pharmacy claims they sometimes do not cover local sales taxes embedded in the transaction, leaving pharmacies to remit taxes they were not reimbursed for. Turner said that retail pharmacies often carry large unreimbursed tax liabilities that threaten their viability in smaller communities and that the bill is intended to address fairness and cash-flow problems for independent pharmacies.
Local-government representatives including the Louisiana Municipal Association (LMA) and city officials opposed the bill, saying their budgets depend on local sales-tax revenue. Mayor Rick Allen (Leesville) said the city would lose about $300,000 annually under a statewide exemption. City of New Orleans testimony estimated roughly $25 million in annual local revenue from prescription sales and projected larger multi-year losses.
The Louisiana Association of Tax Administrators (LATA) supplied the fiscal estimate used by staff; the committee fiscal note estimated local-level revenue losses of about $333 million for FY 2025–26 and projected larger losses over time. Committee members expressed concerns about the size of the potential local revenue shortfall and about creating an unfunded mandate for municipal services.
Representative Turner said he did not intend to push the measure to the floor immediately and sought to use the committee process to force discussion and prompt stakeholders to find alternatives, such as requiring PBMs to reimburse the tax or improving local collection and recovery processes. Several members said they were willing to work with Turner to seek mitigation options.
After public testimony and committee discussion, Representative Echols made the motion to report HB 606 favorably; Representative Billings objected and the motion was decided by roll call (9 yeas, 5 nays). The committee reported the bill favorably.
