Louisiana House Bill HCR7

Louisiana 2015 Regular Session

• Introduced: 4/2/15
• Refer: 4/2/15
• Refer: 4/13/15
• Report Pass: 4/28/15

Caption

Suspends the income tax deduction for net operating loss (EG INCREASE GF RV See Note)

Impact

The suspension of this deduction directly impacts businesses and individuals who experience net operating losses, as they would not be able to carry these losses back to previous tax years or forward into future tax years during the suspension period. This could lead to increased tax liabilities for affected taxpayers, tightening their financial positions. Proponents may argue that this action is intended to strengthen state revenues during a period of fiscal uncertainty, while critics could see it as a burden on struggling businesses that rely on the ability to offset future profits against past losses.

Summary

House Concurrent Resolution 7 (HCR7) aims to suspend the income tax deduction for net operating loss carryovers and carrybacks until sixty days after the final adjournment of the 2016 Regular Session of the Louisiana Legislature. The resolution temporarily halts the provisions of R.S. 47:287.86, which allows taxpayers to reduce their Louisiana net income based on net operating losses. This measure is positioned as a temporary suspension rather than a permanent elimination of the deduction, indicating a response to ongoing fiscal considerations within the state’s budgetary framework.

Sentiment

The sentiment around HCR7 is likely to be mixed. Supporters of the measure would view it as a necessary tool for addressing budgetary shortfalls and enhancing the state's financial health, arguing that it enables greater fiscal responsibility. Conversely, opponents may express concern over the additional financial strain this places on businesses recovering from losses, particularly those in volatile industries or those significantly affected by economic downturns.

Contention

Notable points of contention include the potential long-term effects on businesses' financial strategies and the state’s willingness to prioritize revenue over the financial sustainability of its business community. The discussions surrounding this bill reflect broader debates on fiscal policy, taxation fairness, and the responsibilities of government in alleviating or exacerbating economic hardships faced by businesses.