Proposed bills would add tax to prescriptions, lower state sales tax

Proposed bills would add tax to prescriptions, lower state sales tax

SHREVEPORT, LA (KSLA) - A proposed tax change would add a 4 percent tax to what many call necessities, including prescription medications. But, the representative who authored the bill says it would pay off in the end.

There are three house bills, HB 81, HB 114 and HB 125, that are making their way through the legislature that would change Louisiana's state tax rate. Representative Major Thibaut, who wrote the bills, says if passed by legislators, the voters would decide whether tax should be added to prescriptions, food, and residential utilities. The measure would in turn lower the sales tax. But some say, there should be no tax on necessities.

"We already have to budget ourselves to get the prescriptions that we need for the whole month, so raising taxes I don't think would be beneficial to anybody," said taxpayer Vanessa Naquin.

House Bill 125 is making its way through the legislature and would add taxes onto your daily necessities: food, dairy, fresh fruit and vegetables, soft drinks and prescriptions drugs.

"This would add in on top of the 4.6% in our parish a 4% tax on prescriptions, which means for every $100, you would be paying $8.60 more for your prescriptions," said Susan Caudle, the owner and a pharmacist at Line Avenue Pharmacy.

Representative Major Thibaut authored the bill, as well as two others that are companion pieces. He says this would repeal the final portion of the Stelly tax, which was mostly repealed in 2008 except for the part that was protected by the state's Constitution, including the exemption of state taxes on prescriptions.

If passed by legislators, voters would then have their say at the polls.

"It would broaden our tax base. You'd be paying taxes on more items than you currently are, but the other bill that is tied to it lowers our sales tax rate overall," said Representative Thibaut, (D) New Roads.

"It is a necessity, not something they choose to get or not. At some point, they would make a choice because they couldn't afford the tax," said Caudle.

Thibaut tells KSLA News 12 if people do not want prescriptions to be taxed at a state level, he is willing to re-work the bill.He admits the bill would not be an immediate fix to the state's budget crisis.

"What this is is an attempt to start talking about, 'hey, not just what do we do for this current fiscal year and next, but how do we shape our tax policy that's better for 5 years down the road, 10 years down the road?'" said Thibaut.

Medicare and Medicaid recipients would be exempt from the proposed taxes. According to Thibaut, parish taxes would not be affected, just the state sales tax. The House was scheduled to hear the bill Tuesday, but it has since been put on the calendar for Wednesday.

Currently, there are taxes on prescriptions in Louisiana, but they are on a parish by parish basis. It is already something the Louisiana Independent Pharmacy Association has tried to get rid of. Caddo and Bossier Parishes both have taxes on prescriptions.

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