LEGISLATIVE FISCAL OFFICE
Fiscal Note
Fiscal Note On: HB 5 HLS 21RS 29
Bill Text Version: ORIGINAL
Opp. Chamb. Action:
Proposed Amd.:
Sub. Bill For.:
Date: February 24, 2021 2:52 PM Author: RISER
Dept./Agy.: Revenue
Subject: Annual Sales Tax Holiday Analyst: Benjamin Vincent
TAX/SALES-USE-EXEMPT OR -$4,200,000 GF RV See Note Page 1 of 1
Provides for the effectiveness of the Annual Louisiana Sales Tax Holiday
Present law suspends certain state and local sales and use tax exemptions, subjecting purchases during the Annual
Louisiana Sales Tax Holiday (R.S. 47:305:54) to the full 4.45% state-level tax rate through July 1, 2025, at which time
these purchases will become fully exempt. The holiday, when effective, is held the first consecutive Friday and Saturday
each August, and exempts the first $2,500 of certain consumer purchases of tangible personal property. Eligible purchases
exclude vehicles subject to license and title, and meals furnished for consumption on the premises, including to-go orders.
Proposed law provides that the exemptions under the Annual Louisiana Sales Tax holiday would be reinstated, and fully
exempt from the total rate of 4.45% of state sales and use tax. Proposed law additionally repeals the statutory exemption
for the one-time sales tax holiday in November 2020 (R.S. 47:305:74).
Effective upon governor's signature.
EXPENDITURES 2021-22 2022-23 2023-24 2024-25 2025-26 5 -YEAR TOTAL
State Gen. Fd. $0 $0 $0 $0 $0 $0
Agy. Self-Gen. $0 $0 $0 $0 $0 $0
Ded./Other $0 $0 $0 $0 $0 $0
Federal Funds $0 $0 $0 $0 $0 $0
Local Funds $0 $0 $0 $0 $0 $0
Annual Total $0 $0 $0 $0 $0 $0
REVENUES 2021-22 2022-23 2023-24 2024-25 2025-26 5 -YEAR TOTAL
State Gen. Fd. ($4,200,000) ($4,200,000) ($4,200,000) ($4,200,000) $0 ($16,800,000)
Agy. Self-Gen. $0 $0 $0 $0 $0 $0
Ded./Other $0 $0 $0 $0 $0 $0
Federal Funds $0 $0 $0 $0 $0 $0
Local Funds $0 $0 $0 $0 $0 $0
Annual Total ($4,200,000) ($4,200,000) ($4,200,000) ($4,200,000) $0 ($16,800,000)
EXPENDITURE EXPLANATION
LDR reports that modifying the current set of suspended exemptions will require minor expenditures for tax return form
redesign, and for computer system modification, development, and testing.
REVENUE EXPLANATION
Proposed law provides that the suspended August sales tax holiday in R.S. 47:305.54 would be reinstated, and that these
purchases would be fully exempt from state sales and use tax.
As sales tax data reported for sales tax holidays has fluctuated significantly in recent years, the estimate of the impact of
proposed law is based on a multi-year average of recent sales tax holiday data. Estimated sales associated with this sales
tax holiday totals approximately $95 million per year, implying a state revenue loss of $4.2 mil per year at a 4.45% tax rate.
The state revenue loss is depicted as entirely state general fund in the table above, but small amounts of loss (roughly 1%
of the total) will occur to the Tourism Promotion District allocation and economic development dedications, as well.
Current law provides that the exemption will permanently regain effectiveness in FY26. Thus, proposed law would have no
revenue impact in FY26 or in any following year.
While sales tax holidays may change the timing of purchases from taxable days to tax-exempt days around the holiday
period, they are not likely to materially change the overall level of annual spending. Thus, their effect is a loss of tax
receipts.
Senate Dual Referral Rules House
13.5.1 >= $100,000 Annual Fiscal Cost {S & H} 6.8(F)(1) >= $100,000 SGF Fiscal Cost {H & S}
Gregory V. Albrecht
x 13.5.2 >= $500,000 Annual Tax or Fee 6.8(G) >= $500,000 Tax or Fee Increase
Change {S & H} Chief Economist
or a Net Fee Decrease {S}


Statutes affected:
HB5 Original: 47:302(BB)(113), 47:321(P)(114), 47:1(I)(114), 47:331(V)(114)