LEGISLATIVE FISCAL OFFICE
Fiscal Note
Fiscal Note On: HB 486 HLS 21RS 908
Bill Text Version: ORIGINAL
Opp. Chamb. Action:
Proposed Amd.:
Sub. Bill For.:
Date: April 20, 2021 3:43 PM Author: DEVILLIER
Dept./Agy.: Revenue
Subject: Constitutional Sales Tax Exemptions Analyst: Benjamin Vincent
TAX/SALES-USE-EXEMPT OR INCREASE GF RV See Note Page 1 of 1
(Constitutional Amendment) Provides relative to state sales and use tax exemptions for food for home consumption, utilities
for residential use, and prescription drugs
Current law provides that certain transactions are exempt from state sales and use tax levies. These exemptions include
certain residential utilities, food for home consumption, and prescription drugs.
Proposed constitutional amendment repeals the constitutional provision that exempts residential utilities, food for home
consumption, and prescription drugs from state sales and use tax.
Proposed amendment will be put to a statewide vote November 8, 2022. Effective January 1, 2023.
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. $0 INCREASE INCREASE INCREASE INCREASE $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
EXPENDITURE EXPLANATION
There is no anticipated direct material effect on governmental expenditures as a result of this measure.
REVENUE EXPLANATION
Proposed amendment would repeal constitutional state sales and use tax exemptions for residential utilities, prescription
drugs, and food for home consumption.
Removal of the constitutional provision appears to fully subject the purchases of prescription drugs and residential electricity
to state sales and use tax. Due to statutory provisions in R.S. 47:305, additional legislation appears to be required to
effectively subject food for home consumption, residential natural gas, and water to the sales tax.
The state revenue gain is depicted as entirely state general fund in the table above, but small amounts (roughly 1% of the
total) will accrue to the Tourism Promotion District allocation and economic development dedications, as well.
For informational purposes regarding potential revenue in the event that the constitutional exemptions were additionally
repealed in statute, listed below is the average tax value of the three most recent fiscal years available of the constitutional
exemptions repealed by proposed amendment.
-Food for home consumption: $450 million
-Residential Utilities: $217 million
-Prescription Drugs: $440 million
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
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}