Budget Committee to Discuss Change to Business Tax Policy
The Louisville Metro Council Budget committee will meet Thursday to discuss tax policy.The meeting will focus on whether businesses that lose money in a given year should be allowed to deduct the loss from the next year's profits. For example, if a business loses $1 million one year, then makes $1 million the next year, the business would not pay tax on any income in the profitable year.Councilman Ken Fleming says it will allow businesses of all sizes to pay less money in taxes as they recover from bad business years.Opponents say Metro Government will lose money if the deductions are allowed. Fleming says that's not necessarily the case."Will it delay some revenues? Yes, it probably will delay some revenues for Metro Government," he says. "But if you look at it in terms of having extra cash for businesses to hire new employees or buy new equipment, well, bringing a new employee, that employee will pay payroll taxes. And if you buy new equipment, you'll pay property taxes."Opponents further say there's no guarantee savings will be reinvested.For the deductions to be allowed on the city level, the General Assembly would have to change state law. Fleming has drafted a resolution encouraging it to do so.