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|Amendment should be approved|
Though you may not realize it, a general election in Louisiana will be held Nov. 19.
You may not be aware of it because few local elections will be decided throughout the state that day and only one proposed Constitutional Amendment will dot the general election ballot. With few races and just one Constitutional Amendment to be decided next week, voter turn-out in the general election is expected to be light.
The Constitutional Amendment to be entertained by voters state-wide concerns a real estate transfer tax.
Currently, Louisiana does not levy a tax on real estate transactions though efforts have been made in the past to do just that – tax the sale or transfer of immovable property. Don't let the issue confuse you with taxes levied on property that are based on the value of property. We all pay them directly or indirectly.
Though they're not a tax or fee on a real estate transaction, we all pay fees or incur other costs when we buy or sell property. An attorney is paid to handle the transaction and your local Clerk of Court collects a fee to record the transaction. Those are your run-of-the-mill expenses that must be paid to buy or sell immovable property.
According to the always informative Public Affairs Research Council of Louisiana (PAR), some states and some local governing bodies elsewhere levy a special conveyance tax on a real estate transfer simply to supplement revenues for government. This conveyance tax is called a real estate transfer tax, or RETT. RETTs are usually calculated as a percentage of property value or calculated on the amount of the loan that's incurred to buy property. RETTs may be charged to the buyer or seller or both.
According to PAR, a vote for Constitutional Amendment No. 1 would "prohibit the levy of new taxes or fees upon the sale or transfer of immovable property after November 30, 2011." A vote against the amendment would "leave the Constitution silent on the issue, meaning that the Legislature could pass statutes to create new real estate transfer taxes in the future."
In other words, Constitutional Amendment No. 1 is a preemptive strike to prevent the Legislature from getting creative in employing a new means to tax property either directly or otherwise. That's exactly what it is. No ifs, ands or buts.
Not only would Constitutional Amendment No. 1 prevent the Legislature from passing a law to levy a tax on real estate transactions, it would prohibit parish governing bodies and municipalities from doing it, too. It's not necessarily a good idea to amend the state Constitution to tell local governing bodies what they can or cannot do, but if an amendment to the Constitution is needed to put the brakes on government in general from levying additional taxes on property, so be it. And any new taxes on property should be put on the backburner until the people realize Homestead Exemption creates an unfair burden on the business community in Louisiana. Remember, the first $75,000 of the value of a home is exempt from property taxes thanks to Homestead Exemption. Let's be honest. That does nothing but shift the burden of property taxes levied locally to businesses, which cannot claim a Homestead Exemption.
While Constitutional Amendment No. 1 should be approved by voters in the Nov. 19 general election, we should not overlook the obvious. That is, the Legislature could have dealt with this matter on its own instead of drop-kicking the issue to the people for them to decide.
How many times have we witnessed the Legislature duck an issue by allowing the people to decide it by amending the state Constitution?
Still, if amending the Constitution is needed to prevent government from imposing a new tax on property, by all means, let's amend it.