Hidden Tax Increase!

THANK YOU, last night May 18, 2026, City Council for voting to table the proposed Occupational License Fee Ordinance to give them time to review the legal issues and the questionable taxing method behind it. This is NOT the time to increase costs for businesses that will be passed on to the people!

Ordinance 2026-005, proposed by the Administration, represents a NEW material expansion of municipal taxation authority that is legally vulnerable, economically regressive, and functionally a hidden tax increase on the citizens of Carencro!

This ordinance does not just regulate business—it raises costs for every resident of Carencro.

Proposed by the Administration, the Council has only just seen this at introduction on April 20, 2026. Final adoption scheduled for May 18, 2026.

How the Cost Will Be Passed to Citizens?

Businesses do not absorb taxes—they pass them on.

Mechanisms of pass-through:

1. Higher Prices

• Contractors increase service rates

• Delivery businesses increase fees

• Retailers adjust pricing

2. Reduced Competition

• Out-of-city businesses avoid Carencro

• Fewer service providers → higher costs

3. Service Limitations

• Delivery zones shrink

• Small operators refuse jobs inside city limits

This is a tax increase on the people of Carencro—disguised as administrative clarification.

Download full analysis here:

Analysis of Ordinance 2026-005 Occupational Licenses.pdf

Download PDF • 4.17MB

Read full analysis here:

MEMORANDUM (POLICY + ANALYSIS)

RE: Carencro Ordinance No. 2026-005 – Occupational License Expansion

FROM: Policy & Legal Analysis

DATE: 04/22/2026

1. EXECUTIVE SUMMARY (DIRECT POSITION)

Ordinance 2026-005 represents a material expansion of municipal taxation authority that is legally vulnerable, economically regressive, and functionally a hidden tax increase on the citizens of Carencro.

While framed as a “clarification,” the ordinance:

• Expands taxation to businesses not located in Carencro

• Attempts to tax activity with minimal or no physical presence in the city

• Broadens the tax base to include total gross receipts beyond local activity

👉 The practical effect is clear: This is not a clarification—it is a tax increase that will be passed directly to Carencro residents through higher prices, reduced competition, and fewer service options.

2. LEGAL ANALYSIS

A. Statutory Limits – Louisiana Law

Louisiana Revised Statute R.S. 47:341 authorizes municipalities to impose occupational license taxes only on:

“persons conducting business… within the territorial jurisdiction of the municipality”

Key Legal Constraint:

• Tax authority is geographically limited

• Applies only to business activity occurring within the city

B. Existing Carencro Code (Pre-Ordinance)

The current code properly reflects this limitation:

Businesses “within the corporate limits of the city” are subject to tax

👉 This aligns with state law and established jurisprudence.

C. Expansion Under Ordinance 2026-005

The proposed ordinance dramatically expands this scope by defining “conducting business” as:

Selling, delivering, or providing goods or services to customers located within the city—including remote or online transactions

This creates two major legal problems:

1. Jurisdictional Overreach

• Taxes businesses with no physical or operational presence

• Replaces “activity in the city” with customer location

👉 This conflicts with R.S. 47:341

2. Improper Expansion of Tax Base

The ordinance further states:

Gross receipts “shall not be limited” to those derived from customers in the city

👉 This attempts to tax:

• Revenue earned outside Carencro

• Activity unrelated to the city

Legal Issue:

• A municipality cannot tax beyond its jurisdictional reach

• This exposes the ordinance to:

  • Statutory challenge

  • Constitutional challenge (due process / fair apportionment)

D. Case Law – Mire v. City of Lake Charles

The Louisiana Supreme Court upheld occupational license taxes as:

A tax on the “privilege of conducting business within the city”

Critical Implication:

• The tax must be tied to local business activity

• Not merely economic impact or customer location

👉 Ordinance 2026-005 departs from this principle

3. ECONOMIC IMPACT ANALYSIS

A. This Is a Hidden Tax Increase

Although framed as regulatory clarification, the ordinance:

• Expands the number of taxable businesses

• Expands the revenue subject to taxation

• Expands enforcement reach

👉 That is the definition of a tax increase

B. How the Cost Will Be Passed to Citizens

Businesses do not absorb taxes—they pass them on!

Mechanisms of pass-through:

1. Higher Prices

• Contractors increase service rates

• Delivery businesses increase fees

• Retailers adjust pricing

2. Reduced Competition

• Out-of-city businesses avoid Carencro

• Fewer service providers → higher costs

3. Service Limitations

• Delivery zones shrink

• Small operators refuse jobs inside city limits

C. Real-World Examples

Example 1: Plumber (Regional Business)

• Previously taxed only where domiciled

• Now taxed in every city served

👉 Result:

• Adds cost → passed to homeowner

Example 2: Restaurant Delivery

• Subject to new licensing requirement

• Additional administrative burden

👉 Result:

• Delivery fees increase or service withdrawn

Example 3: Small Service Providers

• Face multi-jurisdictional licensing

👉 Result:

• Avoid smaller markets like Carencro

4. POLICY AND POLITICAL ANALYSIS

A. Impact on Local Residents

This ordinance disproportionately affects:

• Working families

• Homeowners needing repairs

• Residents relying on delivery and services

👉 It functions as a regressive tax

B. Impact on Local Business Climate

Negative Signals Sent:

• Carencro is harder to do business in

• Increased compliance burden

• Increased regulatory uncertainty

👉 This discourages:

• Small business growth

• Regional service providers

• Competitive pricing

C. Competitive Disadvantage

Neighboring municipalities that do not adopt similar policies will:

• Attract business activity

• Offer lower-cost services

👉 Carencro becomes:

• More expensive

• Less competitive

5. RISK ANALYSIS

A. Legal Risk

High likelihood of challenge based on:

• Statutory overreach (R.S. 47:341)

• Improper tax base expansion

• Lack of nexus

B. Enforcement Risk

• Difficult to track remote or delivery businesses

• Selective enforcement creates fairness issues

C. Revenue Risk

• Short-term gains likely

• Long-term erosion due to:

  • Reduced participation

  • Business avoidance behavior

6. STRATEGIC CONCLUSION

Ordinance 2026-005 is:

• Legally vulnerable

• Economically harmful

• Politically risky

It shifts the tax burden:

👉 From government👉 To businesses👉 To citizens

This is a tax increase on the people of Carencro—disguised as administrative clarification.

7. RECOMMENDED ACTIONS

Option 1: Reject Ordinance

• Maintain alignment with state law

• Avoid litigation risk

Option 2: Amend Ordinance (Legally Defensible Path)

Limit applicability to:

• Businesses with substantial activity within the city

• Tax base tied only to:

  • Revenue generated from Carencro-based work

Option 3: Public Transparency

If pursued, ordinance should be clearly presented as:

• A revenue-generating measure

• Not merely a clarification

FINAL STATEMENT

This ordinance does not just regulate business—it raises costs on every resident of Carencro.

And like all business taxes:

👉 The people will pay for it!