A guest column by LBP Director, Edward Ashworth, published in the March 2, 2011 edition of The Shreveport Times, entitled “Playing Louisiana for a patsy,” explains how Louisiana is losing millions in revenue by allowing big, multi-state corporations to shift income earned in Louisiana to a low- or no-tax states. This tax loophole is unfair to local businesses and Louisianans alike. Here is an excerpt:
Local businesses selling the same products often pay higher corporate income taxes than multistate competitors.
This maneuvering hurts Louisiana in two ways. First, by shifting income out of state that was earned here, the state doesn’t get income taxes otherwise owed. Such tax shelters cost the state $30 million to $60 million last year, Louisiana Budget Project analysis estimates.
Second, this income shifting creates an unlevel playing field. Big, multistate firms get state services without paying for them while local businesses unable to use this tax break end up paying full freight. Their costs of doing business, relative to their multistate competitors, are higher, making them less competitive.