Success on the Bayou

Louisiana Averts Fiscal Cliff and Reinstates ELFA Fought-for “Sale for Resale” Exemption

Effective July 1, 2018, the 2% Louisiana state upfront sales/use tax is no more. Enrolled HB 10 reinstated the full resale exemption for leased equipment (as well as 100 or so other exemptions) and also changed the state tax rate to 4.45%, plus applicable local taxes.

Louisiana, facing a $650 million budget shortfall and a June 30 fiscal cliff, averted a state shutdown in their third Special Session after achieving the elusive 70 votes on June 23, passing HB 10 and forwarding it to the Senate. The Senate debated HB 10, passed it and sent it to Gov. John Bel Edwards, who signed it on June 27.

With this as a backdrop, ELFA spent the past two years on the ground working with leadership to address the 2016 removal of the Sale for Resale tax exemption that made Louisiana the only state in the country with a double sales tax on leased equipment. It was estimated that every year this double tax existed it cost our industry more than $110 million.

ELFA’s Scott Riehl working with Louisiana State Rep. Julie Stokes

ELFA is very appreciative of House Ways and Means Committee member Rep. Julie Stokes, who has championed our cause and is running to be Louisiana’s next Secretary of State. Rep. Stokes is pictured at right during the Ways and Means Committee debate with ELFA Vice President of State Government Relations Scott Riehl.

ELFA Works Hard to Protect Member Interests in California

California Assembly Bill 3207 was amended protecting ELFA member interests and passed the Assembly on May 31 by a vote of 48-26. The bill was heard by the Senate Banking and Finance Committee on June 27 and referred to the Senate Appropriations Committee, where it is expected to be heard in August. ELFA will remain vigilant to protect our exemption and expand it if possible.

This is more legislation seeking to expand the definition of a broker under the California Financing Law. ELFA’s state team and volunteers are actively working with the sponsor to best protect the interests of our industry. ELFA’s Legislative and Regulatory Subcommittee, with Moorari Shah of Buckley Sandler stepping up as a team leader available on short notice, provided critically needed technical expertise to achieve what we have thus far. ELFA’s efforts to favorably shape this legislation continue as of this writing.

California Legislation Requiring Interest Rate Disclosure Headed for August Assembly Floor Vote

On June 25, the California Assembly Banking and Finance Committee passed California Senate Bill 1235 in a vote of 9-0 and sent it to the full Assembly for a floor vote expected in August, following their July recess. ELFA worked for months to educate the sponsor and seek relief and received a very narrow exemption that in no way alleviates all our concerns.
Exempting language achieved by ELFA is:

22801 (c) This division shall not apply to either of the following:

1. A commercial financing transaction secured by real property.
   
2. A commercial financing transaction governed by Uniform Commercial Code—Leases (Division 10 (commencing with Section 10101)  of the Commercial Code) or that otherwise arises from the leasing or rental of personal property.

ELFA will take any opportunity available to amend this bill further.