(Constitutional Amendment) Eliminates the income tax deduction for federal income taxes paid for purposes of calculating corporate income tax liability (Items #2 and 17) (EN SEE FISC NOTE GF RV See Note)
The elimination of the federal income tax deduction is expected to increase state revenue since corporations will now have to calculate their corporate income tax liability without deducting federal taxes. This change has the potential to impact the amount of tax revenue collected by the state, affecting budget allocations for various services and programs. Critics, however, may raise concerns about how this measure could burden businesses and impact economic activity within the state.
House Bill 31 proposes a significant change to the taxation structure in Louisiana by removing the ability to deduct federal income taxes when calculating state corporate income taxes. This constitutional amendment is set to be submitted to the voters for approval in the statewide election on November 8, 2016. Proponents of the bill argue that this change will simplify the tax code and generate additional revenue for the state, potentially providing relief to state budgets and funding for public services.
The sentiment surrounding HB 31 appears mixed. Supporters see it as a necessary reform that could enhance the state's fiscal stability and reduce reliance on fluctuating revenue sources. However, there are concerns among businesses and certain stakeholders who fear that increased tax liabilities may deter investment and economic growth in Louisiana. As the bill moves toward a public vote, the sentiment will likely continue to evolve based on public opinion and advocacy efforts from both sides.
Notable points of contention regarding HB 31 center around the implications for businesses and overall state economic health. Advocates argue that it is crucial for the state to modernize its tax system and eliminate unnecessary deductions that complicate tax calculations. Conversely, opponents worry it could disproportionately affect smaller businesses and lead to a more challenging economic environment. As the amendment is presented to voters, these debates will be critical in shaping the outcome.