The second special legislative session convened on Sunday, March 9, 2008 and adjourned on Friday, March 14, 2008. During this one week session, the legislature passed a number of bills designed to recruit and retain businesses in Louisiana.

House Bill No. 1 repealed the permanent penny of the sales tax on utilities. Senate Bill No. 7 included the provisions of House Bill No. 1 which eliminated the permanent penny of sales tax on utilities. Beginning July 1, 2008, the tax on electricity and natural gas will be reduced from 3.3% to 2.3%, while the tax on water and steam will be reduced from 3.8% to 2.8%. The remainder of this tax will be totally eliminated on July 1, 2009.

In addition, beginning July 1, 2008, the sale or purchase by any person of butane or propane will be excluded from state sales tax.

Senate Bill No. 12 accelerates the phase-out of sales taxes paid on manufacturing machinery and equipment by one year. Sales taxes paid on the purchase or lease of manufacturing machinery and equipment will be completely phased out for all periods beginning after July 1, 2009 instead of July 1, 2010 as originally enacted. This phase-out applies to all machinery and equipment purchased by a manufacturer for use in a plant facility predominantly and directly in the actual manufacturing for agricultural purposes or the actual manufacturing process of an item of tangible personal property, which is for ultimate sale to another and not for internal use, at one or more fixed locations in Louisiana.

Elimination of Borrowed Capital from Franchise
Tax Base

Senate Bill No. 10 accelerated the phase-out of borrowed capital from taxable capital for purposes of the Louisiana franchise tax base. This phase-out of tax on debt, as originally enacted, was to begin on January 1, 2012. This amendment accelerated this phase-out by one year, eliminating the franchise tax on debt for all taxable years beginning on January 1, 2011.