Louisiana Immovable Property Tax, Amendment 1 (2011)

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Type:Constitutional amendment
Constitution:Article VII, Section 2.3
Referred by:Louisiana State Legislature
Topic:Taxes
Status:ApprovedApproveda
The Louisiana Immovable Property Tax, Amendment 1, also known as the Louisiana Real Estate Transfer Tax, appeared on the November 19, 2011 statewide ballot in Louisiana as a legislatively-referred constitutional amendment where it was approved. Approveda

The proposed measure prohibited levying new taxes or fees upon the sale or transfer of immovable property.

At the time of the vote, the State of Louisiana was one of 13 states that did not have real estate transfer taxes. New Orleans was the only parish in the State of Louisiana with a transfer tax. With the approval of the measure, the New Orleans tax was grandfathered and capped at the flat $325 rate for all property transfers. According to reports, the New Orleans tax generated $3.6 million in 2010 and was expected to generate $4.4 million in 2011.[1][2]

  • A "yes" vote on the ballot question meant that there would be no added taxes on real estate transfers and the state constitution would be amended to prohibit such future taxes.
  • A "no" vote also would not have implemented taxes on real estate transfers but it would not have implemented a statewide ban.

Election results

Louisiana Amendment 1 (Nov. 19)
ResultVotesPercentage
Approveda Yes 476,938 80.80%
No113,32619.20%

Results via the Louisiana Secretary of State's website with 3,513 out of 4,258 precincts reporting.

Text of measure

The ballot question read:[3]

To prohibit the levy of new taxes or fees upon the sale or transfer of immovable property, including documentary transaction taxes or fees, or any other tax or fee, by the state or any of its political subdivisions after November 30, 2011.

Constitutional changes

Amendment 1 added Article VII, Section 2.3.

The new Article VII, Section 2.3 read:

§2.3. Power to Tax; Limitation; Sale or Transfer of Immovable Property

Section 2.3. No new tax or fee upon the sale or transfer of immovable property, including documentary transaction taxes or fees, or any other tax or fee, shall be levied by the state of Louisiana, by a political subdivision whose boundaries are coterminous with those of the state, or by a political subdivision, as defined in Article VI, Section 44(2) of this constitution after November 30, 2011. A documentary transaction is any transaction pursuant to any instrument, act, writing, or document which transfers or conveys immovable property. Fees for the cost of recordation, filing, or maintenance of documents, or records effectuating the sale or transfer of immovable property, impact fees for development of property, annual parcel fees, and ad valorem taxes shall not be considered taxes or fees upon the sale or transfer of immovable property.

Support


Louisiana REALTORS TV Spot supporting Amendment 1 on November 19 ballot, 11-3-2011

Supporters argued that real estate transfer taxes hindered sales and made property purchases less affordable. Additionally, they argued that the taxes and fees weren't reliable for state government budgets due to the fluctuation with the housing market. Supporters also pointed to other states, such as Missouri and Montana, that did not have the transfer tax.[4]

Supporters

Arguments

  • Louisiana REALTORS supported the proposed amendment. "We consider this a proactive step to place it in the constitution and take this off of the table," said Brad Lambert, a lobbyist for the group.[6] Norman Morris, spokesperson for the group said, "If you look at the numbers, a 1 percent transfer tax can mean thousands of dollars. This type of tax is regressive in nature and targets a small group."[7]
  • Monroe Chamber of Commerce Board of Directors supported the proposed measure. Chamber president Sue Nicholson said, "Not having a transfer tax in Louisiana is certainly an advantage over other states with real estate transfer taxes, especially since the adjacent states of Texas and Mississippi do not have real estate transfer taxes either."[9]
  • Gov. Bobby Jindal, according to his spokesperson, supportedAmendment 1.[10] WAFB cites that a spokesperson for Gov. Bobby Jindal said the administration is in support of the amendment.[11]

Campaign advertising

See also: Louisiana Amendment 1 (2011), television ads

The Louisiana REALTORS released two television ads in November 2011 and a YouTube video in October 2011 of Senior VP Norman Morris explaining the measure and Louisiana REALTORS support.[12]

Donors

According to reports, the Louisiana REALTORS spent an estimated $280,000 in support of the measure.[1]

(last updated December 2011)

Opposition

Opponents argued that the amendment would block future use of transfer taxes should the need arise to generate additional revenue. The provision, some said, may be unnecessary due to current state laws that required a two-thirds vote by the legislature to add a new state tax. Additionally, opponents said that there were other methods to reduce real estate fees such as reducing commissions or attorney fees.[4]

Opponents

Arguments

  • The nonpartisan Council for a Better Louisiana opposed the proposal. They said that "it's hard to imagine any political traction for this type of tax in the foreseeable future" and they did not agree with adding the restriction to the state constitution.[7][13]
    • Robert Scott, with the council, said, "If this goes into the Constitution there would be no statute that the legislature could pass that would create a real estate transfer tax and local governments couldn't create them either."[11]
  • Thetis Cusimano, president of the League of Women Voters of Louisiana said, "Local voters must be able to set their own taxes and fees when they need them, and not be told they cannot assess themselves by the state of Louisiana."[7]
    • Judy Fischer of the League of Women Voters said, "Just leave the constitution the way it is right now. If local governments feel the need to raise revenue with a special real estate tax, they should be able to do that."[14]
  • Louisiana Budget Project analyst Tim Mathis said that the measure would "damage the ability of the state and local governments to provide revenue needed to support health care, education and other essential services." Mathis added that parishes need more flexibility in order to cope with decreased revenues.[15]

Donors

According to the state campaign finance database, there are no registered committees (PACs).

(last updated December 2011)

Media editorial positions

Main article: Endorsements of Louisiana ballot measures, 2011

Support

  • The Town Talk said, "...in this case, we agree: A "Yes" vote is the right vote. Our reasoning has far more to do with the failures of the state Legislature than with the pros and cons of the tax question on the ballot. The reason this matter is on the ballot is that our lawmakers refuse to do what they are elected to do: be responsible stewards of the public's business...We won't fix that today, but we can prevent lawmakers from getting a new way to take more taxpayer money."[16]
  • The Louisiana Weekly said, "This amendment costs the state budget nothing. It simply seeks to prohibit parishes from levying new taxes on the sale of your home or real estate property. (Adds Article VII, Section 2.3 of the State Constitution.)"[17]
  • The Shreveport Times said, "While we don't generally believe changes to the state Constitution are advised, we think voters should take this potential power from the Legislature and give Amendment a "Yes" vote."[18]

Opposition

  • The Times-Picayune said, "There currently is no state fee on real estate sales or transfers, and the city of New Orleans is the only local government that charges such a fee. It would take a two-thirds vote of the Legislature to levy a transfer tax in most, if not all, cases, according to the Bureau of Governmental Research. That is a fairly high threshold and would give constituents the ability to argue for or against such an effort rather than forbidding it altogether. This amendment is another unnecessary addition to the Constitution, which is already a cluttered document."[19]

Path to the ballot

Taxes on the ballot in 2011
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See also: Louisiana legislatively-referred constitutional amendments

If 2/3rds of the members of both houses of the Louisiana State Legislature voted in the affirmative, a legislatively-referred constitutional amendment could be placed on the statewide ballot.

The proposed measure was referred to the Louisiana Secretary of State for referral to the ballot on June 21, 2011.

Timeline

Calendar.png

The following is a timeline of events surrounding the measure:

Event Date Developments
House vote May 24, 2011 House voted 101-0 in favor of referring the measure (4 absent)
Senate vote June 13, 2011 Senate voted 34-0 in favor of referring the measure (5 absent)
Certified June 21, 2011 Referred and certified for the 2011 ballot

See also

By Bailey Ludlam
Ballot measure writer

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Articles

External links

Campaign links

Additional reading

Editorials

References

  1. 1.0 1.1 1.2 Houma Today, "Voters face one proposed amendment on ballot," November 14, 2011
  2. The Advocate, "Transfer tax ban on Nov. 19 ballot," November 12, 2011
  3. Louisiana Legislature, "HB 135 full text," accessed June 28, 2011 (dead link)
  4. 4.0 4.1 Public Affairs Research Council of Louisiana, "PAR guide to the 2011 constitutional amendments," September 2011
  5. 5.00 5.01 5.02 5.03 5.04 5.05 5.06 5.07 5.08 5.09 5.10 5.11 Stay Tax Free - Support Amendment #1, "Supporters," accessed November 16, 2011
  6. The News Star, "Representatives meet to discuss tax amendment," October 26, 2011
  7. 7.0 7.1 7.2 Associated Press, "Constitutional amendment on Louisiana's Nov. 19 ballot would ban real estate tax," November 11, 2011
  8. The Town Talk, "Louisiana real estate lobby hopes to block transfer tax on Nov. 19 ballot," October 31, 2011
  9. The News Star, "Monroe chamber supports Amendment 1," November 3, 2011
  10. KTBS, "Constitutional amendment would ban real estate transfer tax," accessed November 16, 2011
  11. 11.0 11.1 WAFB, "Proposed amendment would ban sales tax on real estate," November 17, 2011
  12. Youtube.com, "Louisiana REALTORS YouTube channel," accessed November 16, 2011
  13. The Town Talk, "Commentary: Louisiana's Amendment 1 should not be passed," November 12, 2011
  14. Transfer tax amendment confuses voters," November 16, 2011
  15. The Times-Picayune, "Louisiana Budget Project opposes ban on real estate transfer tax," November 14, 2011
  16. The Town Talk, "Our View: On Louisiana ballot, a 'Yes' vote says 'No' to a new tax," November 15, 2011
  17. The Louisiana Weekly, "Runoff recommendations," November 14, 2011
  18. The Shreveport Times, "Amendment No. 1 will stop double taxation," November 16, 2011
  19. The Times-Picayune, "Constitutional amendment and other election recommendations: Editorial," November 16, 2011