Louisiana voters will decide on March 29 whether to approve more than 100 pages of revisions to the state constitution related to ad valorem taxes and other fiscal issues. For businesses that operate in Louisiana, one aspect of the proposed reform relates to the taxation of inventory.  

Louisiana is one the few states that imposes a property tax on inventory. Historically, however, the impact of the imposition of the tax on inventory was mitigated as the state provided a credit to businesses that paid inventory tax that could be used to lower or eliminate the business' Louisiana corporate income or franchise tax liability.  

As part of the tax reform package, that credit has been eliminated for periods after January 1, 2026. One aspect of the new law, if passed, would allow local political subdivisions that have historically levied the tax on inventory to exempt it from their tax base, or lower the value of the inventory for property tax purposes. The result, if passed, will foster a new level of opportunity for businesses in the state to work with local officials to lower taxes on inventory.