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Edwards Reluctant to Support Paying Back Businesses Taxed Twice on Out-of-State Income

Louisiana Governor John Bel Edwards

Gov. John Bel Edwards on Monday expressed concern about potentially paying back business owners who were taxed twice on out-of-state income because of a law that has been ruled unconstitutional.

Edwards said his support or lack thereof "would depend on the circumstances," but noted the longstanding practice in such cases has been to let taxpayers pay taxes they feel are improper under protest.

"I would be very reluctant to expand that," he said. "Otherwise, I don’t know where that might end."

Edwards’ comments came during Monday’s meeting of the Press Club of Baton Rouge, where he discussed the progress he feels Louisiana has made during his tenure as governor and his priorities for the upcoming legislative session. K-12 education, including pay raises for teachers and support personnel, is at the top of his agenda.

"The outlook for this year is promising," Edwards said. "It’s promising because of the foundations of success we’ve established."

Louisiana offers a credit for income taxes paid in other states. In 2015 state lawmakers made the credit only available for taxes paid to a state that offers a reciprocal credit to the state’s own residents who do business in Louisiana.

When two Louisiana taxpayers requested a tax credit for $23,180 in taxes on business income earned in Texas, they were denied. They paid the taxes under protest and sued Kimberly Robinson, secretary of the Louisiana Department of Revenue. The state Supreme Court sided with the taxpayers, saying the 2015 law violated the U.S. Constitution by subjecting them to double taxation on interstate income.

Those taxpayers will get their money back. But the Legislative Fiscal Office estimates some $70 million may have been paid as a result of the law.

A taxpayer who didn’t pay under protest could file a claim against the state with the Board of Tax Appeals, though they wouldn’t get their money back unless legislators appropriate money for that purpose. Stephen Waguespack, president and CEO of the Louisiana Association of Business and Industry, told Watchdog in December that legislators from both major parties had expressed a desire to reimburse those taxpayers.

Other topics addressed by Edwards on Monday include:

In the near future, Edwards plans to unveil proposals meant to improve school safety, fight opioid addiction, reduce "red tape" for businesses and professionals, spur economic growth in low-income communities, and promote veteran-owned businesses, he said.

And he mentioned one more goal he said everyone in the room could support.

"In 2019, it is my intention not to have a single special session," Edwards said, drawing laughter and a smattering of applause. Lawmakers held three extraordinary sessions last year alone and four the previous two years.