Bill would let Louisiana parishes opt out of business inventory tax for one-time payment or phased buyout

Representative Desotel told the Senate Committee on Revenue and Fiscal Affairs that House Bill 11 would keep the homestead exemption in the constitution but move other property‑tax exemptions, the special assessment level and provisions related to millage into statute. "What HB 11 actually does is it keeps our homestead exemption in the constitution, but moves all the other exemptions into statute," the sponsor said.

Desotel said the bill’s central feature is an optional parish-level process to eliminate the business inventory tax in exchange for a one‑time payment tied to 2023 inventory‑tax collections or, alternatively, a one‑time payment in exchange for phasing out the inventory tax over five years. He said the bill offers flexibility so parishes can choose an immediate payment (making them whole based on their 2023 inventory collections) or a phased approach to avoid budget shocks.

Richard Nelson, Secretary of Revenue, told the committee the statutory language for most exemptions, the assessment level and millage provisions in HB 11 were taken from existing law. He said the department recommended removing exemptions previously subject to litigation but acknowledged the House maintained an amendment that kept some contested exemptions in place.

Committee members pressed on several practical points. One senator asked whether a parish’s incentive payment would be distributed to all ad‑valorem recipients; Desotel said distributions would be made based on millages so fire districts, school boards and other local recipients would be made whole. The sponsor confirmed a July 2026 deadline to opt in for the payment; parishes could opt out later but without a tied payment because the fund that makes the payment is slated to sunset in a separate bill (HB 12).

Committee members also raised equity and local‑revenue concerns. A senator warned that earlier judicial rulings found some exemptions unconstitutional and cautioned that restoring them could trigger additional litigation and expense. Another senator pointed to Rapides Parish as an example where removing certain taxes could cause multi‑million‑dollar shortfalls and said targeted amendments may be needed to prevent local harms.

After questions and no further testimony, the chair moved to defer House Bill 11 so staff and members could work on amendments. The committee agreed to take HB 11 up again tomorrow for amendment consideration and a vote.

Next steps: HB 11 was deferred for amendment and scheduled for further consideration tomorrow; the committee did not take a final vote on the bill in this session.