Republican lawmakers abandoned their cautious approach to tax incentives last week and advanced a bill that would cost the state and parish governments millions in oil severance revenues, reports Louisiana Illuminator.
House Bill 172, sponsored by Rep. Phillip DeVillier, R-Eunice, would cut the severance tax rate on oil from 12.5% to 8.5% in half-percent increments until fiscal year 2032. The state levies severance taxes when natural resources are extracted or “severed” from the land.
The bill’s fiscal note estimates it would cost Louisiana $90 million over the next five years with costs ballooning each year thereafter. Parishes, which receive a share of severance tax revenues, will also lose millions, with annual costs pegged at $4.9 million by 2032. DeVillier has consistently pushed for tax breaks for the oil industry since he was elected nearly eight years ago. Read the entire story.