A MESSAGE FROM THE PRESIDENT As we step into 2025, I am optimistic about the opportunities ahead for Louisiana’s franchised dealers. The year brings a fresh start, a commitment to advocacy and a focus on critical issues that shape our industry. With a new administration in Washington and an upcoming fiscal session in Louisiana, LADA remains unwavering in its commitment to amplifying our dealers’ voices and safeguarding their businesses to ensure they continue to thrive. So, what’s ahead for LADA in 2025? THE MARCH 29 SPECIAL ELECTION: WHAT’S AT STAKE On March 29, 2025, Louisiana voters will decide on four constitutional amendments, with Amendment 2 being particularly significant for businesses, especially automobile dealers. Amendment 2 introduces critical tax reforms, including lowering personal and corporate income tax rates, increasing income tax deductions for citizens over 65, capping government growth, preserving the homestead exemption, securing a permanent teacher pay raise, and — most importantly — addressing the business inventory tax. This critical amendment gives the state the authority to pay parishes via the Revenue Stabilization Trust for those parishes’ agreement to no longer collect taxes on business inventory. Amendment 2 also establishes a “Local Revenue Fund,” which would be a constitutionally protected bucket of money to be distributed to local governments to compensate them for revenue losses they would incur by eliminating their inventory tax. However, the approval of Amendment 2 is merely the first step in this process of eliminating the tax on business inventory. Complementing this, Looking Ahead A Year of Opportunities for Louisiana’s Dealers BY COULTER McMAHEN, PRESIDENT/CEO, LADA House Bill 11 by Representative Daryl Deshotel outlines the statutory framework that parishes must follow. Under this bill, each parish’s key entities — the sheriff, school board and parish governing authority — must collectively decide by July 1, 2026, whether to opt into this exemption program. They do this by signing a written agreement to accept the state payment in lieu of collecting business inventory taxes. Once this decision is made, it is irrevocable. For instance, if the Bossier Parish sheriff, school board and governing authority all agree to accept the exemption, opting for a one-time $15 million payment from the state instead of ongoing tax collection, this decision becomes permanent as of July 1, 2026. Even if subsequent officials wish to reinstate business inventory taxes, they are legally barred from doing so. Following the decision to accept payment, the state treasurer will disburse payments to the local tax collector, who will then distribute these funds proportionally among the parish’s taxing authorities. Through LADA’s advocacy in the November special session, we were able to secure an important safeguard: If Amendment 2 fails — or if it passes but your parish does not accept the state’s compensation — automobile dealerships operating as pass-through entities (LLCs, S-corps, partnerships) will continue to benefit from the inventory tax credit indefinitely, while C-corps will retain the credit until July 2026. Without approval of Amendment 2 and, ultimately, a decision by parishes to no longer tax business inventory, Louisiana businesses will remain burdened by this anti-business tax, hampering economic growth and competitiveness. We encourage you and your employees to get out and vote YES on Constitutional Amendment 2. THE 2025 FISCAL LEGISLATIVE SESSION AND BEYOND This year’s legislative session, beginning April 14, will center on critical fiscal matters — including tax policy, budget allocations and economic development incentives — that could significantly impact dealership operations. Beyond fiscal policy, we are also pursuing opportunities to strengthen dealer-related laws to enhance operations across our industry, so stay tuned for updates. We encourage all members to join us for Dealer Day at the Capitol on May 12-13, during the session. This event offers a valuable opportunity to engage directly with legislators, advocate for key industry issues and showcase the strength and importance of Louisiana’s auto retail sector. Your participation makes a meaningful difference. 4
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