LEGISLATIVE FISCAL OFFICE
Fiscal Note
Fiscal Note On: HB 540 HLS 21RS 960
Bill Text Version: ORIGINAL
Opp. Chamb. Action:
Proposed Amd.:
Sub. Bill For.:
Date: April 26, 2021 4:25 PM Author: HILFERTY
Dept./Agy.: Revenue
Subject: Exemptions: Construction Materials to Charitable Groups Analyst: Benjamin Vincent
TAX/SALES & USE OR DECREASE GF RV See Note Page 1 of 1
Provides a sales and use tax exemption for purchases of construction materials by certain charitable organizations
Present law temporarily suspends numerous exemptions and exclusions, fully applying a combined state sales and use tax
rate of 4.45% to taxable purchases, until June 30,2025, at which time.
Proposed law fully reinstates a state and local exemption for the sale of construction materials to Hands on New Orleans and
Rebuilding Together New Orleans when such purchases are for use in either constructing, rehabilitating, or renovating
residential dwellings. Proposed law additionally expands the exemption, by removing the eligibility restriction requiring that
such purchases are only eligible for dwellings destroyed by Hurricane Katrina or Rita.
Effective upon governor’s signature.
EXPENDITURES 2021-22 2022-23 2023-24 2024-25 2025-26 5 -YEAR TOTAL
State Gen. Fd. SEE BELOW $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
REVENUES 2021-22 2022-23 2023-24 2024-25 2025-26 5 -YEAR TOTAL
State Gen. Fd. DECREASE DECREASE DECREASE DECREASE DECREASE
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 DECREASE DECREASE DECREASE DECREASE DECREASE
Annual Total
EXPENDITURE EXPLANATION
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 reinstates and expands an existing state and local sales tax exemption for sales of construction materials to
certain charitable organizations for certain projects. The exemption was initially enacted in 2009, with a maximum of
$500,000 in allowed exemptions for any calendar year.
Proposed law would reinstate the exemption and expand eligibility to houses that were not destroyed by Hurricane Katrina or
Rita. Additionally, proposed law retains the $500,000 annual maximum authorized for this exemption. For information
purposes, since the creation of the exemption, its revenue impact has been reported either as “negligible” or included under
“Other Exemptions” in the Tax Exemption Budget.
The reinstatement of the exemption, in isolation, would result in a state general fund and local revenue decrease for FY22-
FY25, until the temporary suspension of the exemption expires as provided in current law. Expanding the exemption, in
isolation, would cause an additional, indeterminable state general fund and local revenue decrease for all years. While
capped at $500,000 per year, the exemption is likely to result in revenue losses considerably smaller than that maximum.
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}


Statutes affected:
HB540 Original: 47:65(A)