LAFAYETTE PARISH — Starting January 1st, Louisianians will see an increase in the sales tax, making it the highest in the nation. This change, part of a new law passed during the recent special legislative session, will affect the cost of some services and goods statewide.
The state’s sales tax, currently at 4.45%, will rise to 5%, bringing the combined state and local sales taxes to around 12% on purchases. For example, on a $10 purchase, consumers will pay an additional $1 in tax, making the total cost $11.
Governor Jeff Landry approved the tax overhaul, which is designed to generate additional revenue for the state. However, local business owners are concerned about the impact the hike could have on their bottom line.
Erin Landry, owner of Club Tan in Lafayette, is worried that the higher tax will hurt businesses like hers, particularly as many of the products sold—such as tanning lotions and other products.
“People are so strapped for cash right now, and any extra costs we add on could cut into our bottom line,” said Landry. Similarly, in the restaurant industry, Allie Guidry, a local server, is concerned that the sales tax increase will discourage spending, especially when it comes to tipping.
“It’s already expensive, and you already have to tip on top of that. If people start pinching pennies and cutting back on tips, this will affect everybody,” Guidry said. “I’ve already noticed the strain. I went grocery shopping and noticed it was $15 more than what it should have been.”Guidry and other workers in the service industry are particularly concerned that the added financial burden could result in fewer customers dining out or leaving lower tips, further hurting already low wages.
Under the new law, the sales tax rate will remain at 5% for the next five years, before gradually dropping to 4.75%.
