HLS 161ES-6 ENGROSSED
2016 First Extraordinary Session
HOUSE BILL NO. 75
BY REPRESENTATIVE STOKES
TAX/INCOME TAX: Changes the rates and brackets for purposes of calculating individual
income tax liability and eliminates certain deductions (Item #3)
1 AN ACT
2To amend and reenact R.S. 47:32(A), 79, 293(10), and 295(B) and to repeal R.S. 47:293(3)
3 and (9)(a)(xi) and 294, relative to the individual income tax; to provide for the
4 calculation of individual income tax liability; to provide for the rates and brackets
5 on individual income tax; to provide for certain deductions and credits; to reduce
6 certain deductions and credits; to repeal the deduction for excess federal itemized
7 personal deductions; to provide for effectiveness; and to provide for related matters.
8Be it enacted by the Legislature of Louisiana:
9 Section 1. R.S. 47:32(A), 79, 293(10), and 295(B) are hereby amended and
10reenacted to read as follows:
11 §32. Rates of tax
12 A. On individuals. The tax to be assessed, levied, collected and paid upon
13 the taxable income of an individual shall be computed at the following rates:
14 (1) Two percent No tax shall be assessed on that portion of the first twelve
15 thousand five hundred dollars of net income which is in excess of the credits against
16 net income provided for in R.S. 47:79;
17 (2) Four and one-quarter of one percent on the next thirty-seven thousand
18 five hundred dollars of net income;
19 (3) Six percent on any amount of net income in excess of fifty thousand
20 twelve thousand five hundred dollars of net income.
21 * * *
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1 §79. Credits of individuals against net income
2 A. Personal exemption.
3 (1) An exemption of twenty-five hundred dollars is allowed for the taxpayer;
4 and an additional exemption of twenty-five hundred dollars is allowed for the spouse
5 of the taxpayer if a separate return is made by the taxpayer, and if the spouse has no
6 gross income and is not the dependent of another taxpayer for the calendar year in
7 which the taxable year of the taxpayer begins. A person who occupied status as head
8 of family during the entire taxable year is allowed an exemption of five thousand
9 dollars.
10 (2) In addition to the exemptions above provided for, an An exemption of
11 one thousand dollars is allowed for the taxpayer who is blind or who has sustained
12 the loss of one or more limbs or who has an intellectual disability or who is deaf. As
13 used herein the word "blind" shall mean and refer to persons who have been
14 determined by a qualified ophthalmologist or optometrist to have no vision or to
15 have vision which is insufficient for use in an occupation or activity for which sight
16 is essential a person who, after examination by a licensed physician skilled in
17 diseases of the eye or by a licensed optometrist, has been determined to have not
18 more than 20/200 central visual acuity in the better eye with correcting lenses, or an
19 equally disabling loss of the visual field as evidenced by a limitation to the field of
20 vision in the better eye to such a degree that its widest diameter subtends an angle
21 of no greater than twenty degrees. For purposes herein, the word "deaf" shall be
22 defined as in Paragraph (B)(5) Subsection B of this Section. Each person claiming
23 an exemption under the provisions of this Paragraph Subsection shall be able to
24 prove such claim by certificate of a qualified physician or optometrist.
25 B. Credit Deductions for dependents.
26 (1) In general. A credit of four hundred dollars is allowed for each
27 dependent (as defined in Subsection C of this Section),
28 (a) whose gross income for the calendar year in which the taxable year of the
29 taxpayer begins is less than $600 or
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1 (b) who is a child of the taxpayer and who (i) has not attained the age of
2 nineteen at the close of the calendar year in which the taxable year of the taxpayer
3 begins, or (ii) is a student.
4 (2) Credit denied in case of certain married dependents. No credit is allowed
5 under this Subsection for any dependent who has made a joint return with his spouse
6 under R.S. 47:101(B), for the taxable year beginning in the calendar year in which
7 the taxable year of the taxpayer begins.
8 (3) Child defined. For purposes of this Subsection (B)(1)(b) of this
9 Subsection, the term "child" means an individual who (within the meaning of
10 Subsection C of this Section) is a son, stepson, daughter, or stepdaughter of the
11 taxpayer.
12 (4) Student and educational institution defined. For purposes of Item
13 (B)(1)(b)(ii) of this Subsection, the term "student" means an individual who during
14 each of five calendar months during the calendar year in which the taxable year of
15 the taxpayer begins,
16 (a) is a full-time student at an educational institution; or
17 (b) is pursuing a full-time course of institutional on-farm training under the
18 supervision of an accredited agent of an educational institution or of a state or
19 political subdivision of a state. For purposes of this Subsection, the term
20 "educational institution" means only an educational institution which normally
21 maintains a regular faculty and curriculum and normally has a regularly organized
22 body of students in attendance at the place where its educational activities are carried
23 on.
24 (5) Credit for certain dependents. (1) A credit deduction of one thousand
25 dollars is allowed for each dependent as defined in Subsection C of this Section
26 allowed in determining federal income tax liability who is blind or deaf or who has
27 sustained the loss of one or more limbs or who has an intellectual disability. As
28 herein used the word "blind" shall be defined as in Paragraph (A)(2) Subsection A
29 of this Section. For purposes herein, the word "deaf" shall mean and refer to persons
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1 whose hearing is so impaired that it is insufficient for use in an occupation or activity
2 for which hearing is essential. The taxpayer claiming credit the deduction as herein
3 provided shall be able to prove such claim by certificate of a qualified physician or
4 optometrist issued for each such dependent for which a credit deduction is claimed.
5 (2) In addition to the deduction authorized in Paragraph (1) of this
6 Subsection, an additional deduction of one thousand dollars shall be allowed for each
7 dependent as allowed in determining federal income tax liability.
8 C. Dependent defined.
9 (1) General definition. For purposes of this Chapter, the term "dependent"
10 means any of the following individuals over half of whose support, for the calendar
11 year in which the taxable year of the taxpayer begins, was received from the taxpayer
12 (or is treated under Paragraph (C)(3) of this Subsection as received from the
13 taxpayer):
14 (a) a son or daughter of the taxpayer, or a descendant of either,
15 (b) a stepson or stepdaughter of the taxpayer,
16 (c) a brother, sister, stepbrother, or stepsister of the taxpayer,
17 (d) the father or mother of the taxpayer, or an ancestor of either,
18 (e) a stepfather or stepmother of the taxpayer,
19 (f) a son or daughter of a brother or sister of the taxpayer,
20 (g) a brother or sister of the father or mother of the taxpayer,
21 (h) a son-in-law, daughter-in-law, father-in-law, mother-in-law,
22 brother-in-law, or sister-in-law of the taxpayer,
23 (i) an individual who, for the taxable year of the taxpayer, has as his
24 principal place of abode the home of the taxpayer and is a member of the taxpayer's
25 household, or
26 (j) an individual who,
27 (i) is a descendant of a brother or sister of the father or mother of the
28 taxpayer,
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1 (ii) for the taxable year of the taxpayer received institutional care required
2 by reason of a physical or mental disability, and
3 (iii) before receiving such institutional care, was a member of the same
4 household as the taxpayer.
5 (2) Rules relating to general definition. For purposes of this Section the rules
6 set forth below will apply.
7 (a) The terms "brother" and "sister" include a brother or sister by the
8 halfblood.
9 (b) In determining whether any of the relationships specified in this Section
10 exists, a child legally adopted by an individual shall be treated as if he were the child
11 of such individual by blood.
12 (c) The term "dependent" does not include any individual who is not a citizen
13 of the United States unless such individual is a resident of the United States, of a
14 country contiguous to the United States, of the Canal Zone, or of the Republic of
15 Panama. The preceding sentence shall not exclude from the definition of
16 "dependent" any child of the taxpayer born to him, or legally adopted by him, in the
17 Philippine Islands before January 1, 1956, if the child is a resident of the Republic
18 of the Philippines, and if the taxpayer was a member of the Armed Forces of the
19 United States at the time the child was born to him or legally adopted by him.
20 (d) A payment to a wife which is includible in the gross income of the wife
21 under R.S. 47:42(C) shall not be treated as a payment by her husband for the support
22 of any dependent.
23 (3) Multiple support agreements. For purposes of Paragraph (C)(1) of this
24 Subsection, over half of the support of an individual for a calendar year shall be
25 treated as received from the taxpayer if:
26 (a) no one person contributed over half of such support;
27 (b) over half of such support was received from persons each of whom, but
28 for the fact that he did not contribute over half of such support, would have been
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1 entitled to claim such individual as a dependent for a taxable year beginning in such
2 calendar year;
3 (c) the taxpayer contributed over ten per cent of such support; and
4 (d) each person described in Subparagraph (C)(3)(b) of this Section (other
5 than the taxpayer) who contributed over ten per cent of such support files a written
6 declaration (in such manner and form as the collector may by regulations prescribe)
7 that he will not claim such individual as a dependent for any taxable year beginning
8 in such calendar year.
9 (4) Special support test in case of students. Amounts received as
10 scholarships for study at an educational institution by an individual who is:
11 (a) a son, stepson, daughter, or stepdaughter of the taxpayer (within the
12 meaning of this Section), and
13 (b) a student, shall not be taken into account in determining whether such
14 individual received more than half of his support from the taxpayer.
15 D. Exception for certain heads of families. If the taxpayer would not occupy
16 the status of head of family except by reason of there being one or more dependents
17 for whom he would be entitled to credit under Subsection C above the credit under
18 such paragraph shall be disallowed with respect to one of such dependents.
19 E. Limitation on portion of credit deduction allowable. There shall be
20 allowed only that portion of the credits deductions set forth in the preceding
21 Subsections of this Section which the net income of the individual taxable under this
22 Chapter bears to the total net income of such individual.
23 * * *
24 §293. Definitions
25 The following definitions shall apply throughout this Part, unless the context
26 requires otherwise:
27 * * *
28 (10) "Tax table income", for nonresident individuals, means the amount of
29 Louisiana income, as provided in this Part, allocated and apportioned under the
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1 provisions of R.S. 47:241 through 247, plus the total amount of the personal
2 exemptions and deductions already included in the tax tables promulgated by the
3 secretary under authority of R.S. 47:295, less the proportionate amount of the federal
4 income tax liability, excess federal itemized personal deductions, the temporary
5 teacher deduction, the recreation volunteer and volunteer firefighter deduction, the
6 construction code retrofitting deduction, any gratuitous grant, loan, or other benefit
7 directly or indirectly provided to a taxpayer by a hurricane recovery entity if such
8 benefit was included in federal adjusted gross income, the exclusion provided for in
9 R.S. 47:297.3 for S Bank shareholders, the deduction for expenses disallowed by
10 I.R.C. Section 280C, the deduction for net capital gains, and personal exemptions
11 and deductions provided for in R.S. 47:294 R.S. 47:79. The proportionate amount
12 is to be determined by the ratio of Louisiana income to federal adjusted gross
13 income. When federal adjusted gross income is less than Louisiana income, the ratio
14 shall be one hundred percent.
15 * * *
16 §295. Tax imposed on individuals; administration
17 * * *
18 B. The secretary shall establish tax tables that calculate the tax owed by
19 taxpayers based upon where their taxable income falls within a range that shall not
20 exceed two hundred fifty dollars. The secretary shall provide in the tax tables that
21 the combined personal exemption, standard deduction, and other exemption
22 deductions in R.S. 47:294 shall be deducted from the two percent bracket. If such
23 combined exemptions and deductions exceed the two percent bracket, the excess
24 shall be deducted from the four percent bracket. If such combined exemptions and
25 deductions exceed the two and four percent brackets, the excess shall be deducted
26 from the six percent bracket.
27 * * *
28 Section 2. R.S. 47:293(3) and (9)(a)(xi) and 294 are hereby repealed in their entirety.
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1 Section 3. The provisions of this Act shall be applicable to all taxable periods on and
2after January 1, 2017.
3 Section 4. This Act shall take effect and become operative if and when the proposed
4amendment of Article VII of the Constitution of Louisiana contained in the Act which
5originated as House Bill No._________ of this 2016 First Extraordinary Session of the
6Legislature is adopted at a statewide election and becomes effective.
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)]
HB 75 Engrossed 2016 First Extraordinary Session Stokes
Abstract: Changes the rates and brackets for purposes of calculating individual income tax
liability, eliminates the standard and certain dependency deductions and repeals the
deduction for excess federal itemized personal deductions.
Present law provides for a tax to be assessed, levied, collected, and paid upon the taxable
income of an individual at the following rates:
(1)2% on the first $12,500 of net income;
(2)4% on the next $37,500 of net income;
(3)6% on net income in excess of $50,000.
Proposed law changes individual income tax rates as follows:
(1)From 2% on the first $12,500 of net income to 0% on the first $12,500 of net
income.
(2)From 4% on the next $37,500 of net income to 4.25% on net income in excess of
$25,000.
Present law authorizes a deduction from individual income taxes for excess federal itemized
personal deductions. The term "excess federal itemized personal deductions" is defined to
mean the amount by which the federal itemized personal deductions exceed the amount of
federal standard deduction designated for the filing status used for the taxable period on the
individual income tax return.
Proposed law repeals present law that allows taxpayers to deduct excess federal itemized
personal deductions on their state individual income tax returns beginning Jan. 1, 2016.
Present law provides that all personal exemptions and deductions for dependents allowed in
determining federal income tax liability shall be allowed in determining La. tax liability.
Further provides for a combined personal exemption of $4,500 for single, individual filers,
$9,000 for married, joint filers, $4,500 for married, separate filers, and $9,000 for filers who
are the head of household.
Proposed law repeals present law.
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Present law authorizes a credit of $400 for each dependent who meets certain criteria.
Proposed law repeals present law in favor of a $1,000 deduction for each dependent as
defined in present law.
Present law authorizes an additional deduction of $1,000 for each allowable exemption in
excess of those required to qualify for the exemption allowable under R.S. 47:294(A).
Present law requires the secretary to establish tax tables that calculate the tax owed by
taxpayers based upon where their taxable income falls within a range that does not exceed
$250. Further requires the secretary to provide in the tax tables the combined personal
exemption, standard deduction, and other exemption deductions in present law which is
deducted from the 2% bracket. If the combined exemptions and deductions exceed the 2%
bracket, the excess is deducted from the 4% bracket, and then the 6% bracket.
Proposed law deletes the provisions authorizing the combined personal exemption, standard
deduction, and other exemption deductions to be deducted from the income tax brackets.
Applicable to taxable periods on and after Jan. 1, 2017.
Effective if and when the proposed amendment of Article VII of the Constitution of La.
contained in the Act which originated as House Bill No._____ of this 2016 1
st
E.S. of the
Legislature is adopted at a statewide election and becomes effective.
(Amends R.S. 47:32(A), 79, 293(10), and 295(B); Repeals R.S. 47:293(3) and (9)(a)(xi) and
294)
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