Oops! No back-to-school tax-free holiday this year

Friday, Aug. 3, was supposed to be the start of a tax-free weekend for Louisiana consumers — commonly dubbed the “back-to-school” state sales tax holiday.
That’s not gonna happen this year.
In last month’s scramble to balance the state budget by continuing part of an expiring penny of the sales tax, legislators inadvertently discontinued — for the next seven years — the three state sales tax holidays, which were expected to cost the state about $5.2 million this year.
Though generally supportive of sales tax holidays, the goal of the legislators was to find a tax rate low enough to win Republican support but high enough to pay for the hospitals, colleges and other services that lawmakers didn’t want to cut dramatically.
Act 1, the new law, sets the state sales tax at 4.45 percent of every dollar spent, down from 5 percent. Local governments add their own sales taxes to purchases.
Every exemption to paying state sales taxes — and Louisiana has more than 200 of them — requires a higher overall rate to raise the same amount of money for government services. Lawmakers jettisoned about half of those exemptions to reach the revenue goal.
Officially, the Annual Louisiana Sales Tax Holiday was to begin Friday morning and continue through Saturday night.
Since 2007, the holiday forgave most state sales taxes on the first $2,500 of a purchase price of specific items. Vehicles weren’t included.
Because the holiday fell right before school starts, a lot of those purchases were school supplies. The tax break doesn’t include local sales taxes, but local authorities can exempt their sales taxes too, if they want.
The Department of Revenue estimated the state would lose about $4.7 million from this weekend’s holiday.
Next on the schedule is the Second Amendment Sales Tax Holiday for Sept. 7, 8 and 9.
Since 2009, the holiday exempted both state and local sales taxes on consumer purchases of firearms, ammunition and hunting supplies. The state was expected to lose an estimated $404,000.
The third holiday is for hurricane supplies and takes place during the last weekend of May. The Disaster Preparedness Sales Tax Holiday, established in 2008, forgave most of the state sales taxes on supplies like batteries, cellphone chargers, storm shutters, blue ice, tarpaulin and other supplies.
This holiday cost the state an estimated $34,000. If the holiday would have taken place in May 2019, the state would have lost $68,000 in lost sales tax revenues. It won’t happen again, unless the law changes, until after July 2025.
Of the 204 instances where sales taxes don’t have to be paid, House Bill 27 included 110 of those exemptions. The remaining breaks, including sales tax holidays, were left off the list and would no longer be honored.
That list, with a few updates, was copied into the bill almost word for word and eventually passed with a vote of 74-24 and was signed into law on June 24.
The only time sales tax holidays were mentioned publicly was during the May 25 debate of the bill on the House floor. The majority leader was batting away a half dozen or so attempts to add the excluded exemptions to the list.
State Rep. Stephen Dwight, R-Lake Charles, tried to reinsert the sales tax holidays on the list of acceptable exemptions. House Majority Leader Lance Harris, R-Alexandria, objected, saying “We’re going eat this thing up,” meaning that adding more exemptions would chip away at the amount of revenues that could be raised.
The House refused to return the sales tax holidays on a vote of 43-56.
Nevertheless, it is predicted that someone will try to reinstate the sales tax holidays when the Legislature convenes again April 8, 2019.
If not, sales tax holidays will resume on July 1, 2025.