DIGEST
The digest printed below was prepared by House Legislative Services. It constitutes no part of
the legislative instrument. The keyword, one-liner, abstract, and digest do not constitute part of
the law or proof or indicia of legislative intent. [R.S. 1:13(B) and 24:177(E)]
Katrina Jackson HB No. 626
Abstract: Reduces the rate of tax on the taxable income of corporations in La. and repeals the
corporate franchise tax and federal deductions allowed on net state corporate income tax.
CORPORATE INCOME TAX
Present law provides that the tax to be assessed, levied, collected, and paid on the La. taxable
income of every corporation shall be computed at the following rates:
(1)4% on the first $25,000 of La. taxable income.
(2)5% on La. taxable income above $25,000 but not in excess of $50,000.
(3)6% on La. taxable income above $50,000 but not in excess of $100,000.
(4)7% on La. taxable income above $100,000 but not in excess of $200,000.
(5)8% on all La. taxable income in excess of $200,000.
Proposed law reduces the present law rates for the tax on the taxable income of corporations to
the following:
(1)3% on the first $25,000 of La. taxable income.
(2)4% on La. taxable income above $25,000 but not in excess of $50,000.
(3)5% on La. taxable income above $50,000 but not in excess of $100,000.
(4)6% on La. taxable income above $100,000 but not in excess of $200,000.
(5)7% on all La. taxable income in excess of $200,000.
Present law provides corporations certain allowable deductions of federal income taxes paid.
Proposed law repeals the allowable federal deductions in present law.
CORPORATE FRANCHISE TAX Present law provides for the imposition of corporation franchise tax which requires every
domestic corporation and every foreign corporation, exercising its charter, or qualified to do
business or actually doing business in this state, or owning or using any part or all of its capital,
plant, or any other property in this state, to pay an annual tax at the rate of $1.50 for each $1,000
on the first $300,000 of taxable capital and $3 for each $1,000 which exceeds $300,000 of
taxable capital. Present law defines "taxable capital", "capital stock", and "surplus and undivided
profits" for purposes of the corporation franchise tax, provides for a formula for the allocation of
taxable capital, provides for exemptions, and provides for the due date, payment, and reporting of
the tax.
Proposed law repeals present law relative to the imposition of a corporation franchise tax.
Effective Jan. 1, 2014, and applicable to all tax years beginning on and after Jan. 1, 2014.
(Amends R.S. 47:32(C) and 287.12; Repeals R.S. 47:287.79, 287.85, and 601-618)