HLS 162ES-58 ENGROSSED
2016 Second Extraordinary Session
HOUSE BILL NO. 17
BY REPRESENTATIVE STOKES
TAX/INCOME TAX: Changes the rates and brackets for purposes of calculating individual
income tax liability and eliminates certain deductions (Items #40 and 43)
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;. As an offset for the exemption of the first
17 twelve thousand five hundred dollars of net income from state income taxation, no
18 taxpayer shall be allowed to claim the personal exemptions and credits for
19 individuals and dependents provided for in R.S. 47:79 and R.S. 47:294.
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1 (2) Four Three and eight-tenths of one percent on the next thirty-seven
2 thousand five hundred dollars of net income;
3 (3) Six percent on any amount of net income in excess of fifty thousand
4 twelve thousand five hundred dollars of net income.
5 * * *
6 §79. Credits of individuals against net income
7 A. Personal exemption.
8 (1) An exemption of twenty-five hundred dollars is allowed for the taxpayer;
9 and an additional exemption of twenty-five hundred dollars is allowed for the spouse
10 of the taxpayer if a separate return is made by the taxpayer, and if the spouse has no
11 gross income and is not the dependent of another taxpayer for the calendar year in
12 which the taxable year of the taxpayer begins. A person who occupied status as head
13 of family during the entire taxable year is allowed an exemption of five thousand
14 dollars.
15 (2) In addition to the exemptions above provided for, an An exemption of
16 one thousand dollars is allowed for the taxpayer who is blind or who has sustained
17 the loss of one or more limbs or who has an intellectual disability or who is deaf. As
18 used herein the word "blind" shall mean and refer to persons who have been
19 determined by a qualified ophthalmologist or optometrist to have no vision or to
20 have vision which is insufficient for use in an occupation or activity for which sight
21 is essential a person who, after examination by a licensed physician skilled in
22 diseases of the eye or by a licensed optometrist, has been determined to have not
23 more than 20/200 central visual acuity in the better eye with correcting lenses, or an
24 equally disabling loss of the visual field as evidenced by a limitation to the field of
25 vision in the better eye to such a degree that its widest diameter subtends an angle
26 of no greater than twenty degrees. For purposes herein, the word "deaf" shall be
27 defined as in Paragraph (B)(5) Subsection B of this Section. Each person claiming
28 an exemption under the provisions of this Paragraph Subsection shall be able to
29 prove such claim by certificate of a qualified physician or optometrist.
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1 B. Credit Deductions for dependents.
2 (1) In general. A credit of four hundred dollars is allowed for each
3 dependent (as defined in Subsection C of this Section),
4 (a) whose gross income for the calendar year in which the taxable year of the
5 taxpayer begins is less than $600 or
6 (b) who is a child of the taxpayer and who (i) has not attained the age of
7 nineteen at the close of the calendar year in which the taxable year of the taxpayer
8 begins, or (ii) is a student.
9 (2) Credit denied in case of certain married dependents. No credit is allowed
10 under this Subsection for any dependent who has made a joint return with his spouse
11 under R.S. 47:101(B), for the taxable year beginning in the calendar year in which
12 the taxable year of the taxpayer begins.
13 (3) Child defined. For purposes of this Subsection (B)(1)(b) of this
14 Subsection, the term "child" means an individual who (within the meaning of
15 Subsection C of this Section) is a son, stepson, daughter, or stepdaughter of the
16 taxpayer.
17 (4) Student and educational institution defined. For purposes of Item
18 (B)(1)(b)(ii) of this Subsection, the term "student" means an individual who during
19 each of five calendar months during the calendar year in which the taxable year of
20 the taxpayer begins,
21 (a) is a full-time student at an educational institution; or
22 (b) is pursuing a full-time course of institutional on-farm training under the
23 supervision of an accredited agent of an educational institution or of a state or
24 political subdivision of a state. For purposes of this Subsection, the term
25 "educational institution" means only an educational institution which normally
26 maintains a regular faculty and curriculum and normally has a regularly organized
27 body of students in attendance at the place where its educational activities are carried
28 on.
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1 (5) Credit for certain dependents. (1) A credit deduction of one thousand
2 dollars is allowed for each dependent as defined in Subsection C of this Section
3 allowed in determining federal income tax liability who is blind or deaf or who has
4 sustained the loss of one or more limbs or who has an intellectual disability. As
5 herein used the word "blind" shall be defined as in Paragraph (A)(2) Subsection A
6 of this Section. For purposes herein, the word "deaf" shall mean and refer to persons
7 whose hearing is so impaired that it is insufficient for use in an occupation or activity
8 for which hearing is essential. The taxpayer claiming credit the deduction as herein
9 provided shall be able to prove such claim by certificate of a qualified physician or
10 optometrist issued for each such dependent for which a credit deduction is claimed.
11 (2) In addition to the deduction authorized in Paragraph (1) of this
12 Subsection, an additional deduction of one thousand dollars shall be allowed for each
13 dependent as allowed in determining federal income tax liability.
14 C. Dependent defined.
15 (1) General definition. For purposes of this Chapter, the term "dependent"
16 means any of the following individuals over half of whose support, for the calendar
17 year in which the taxable year of the taxpayer begins, was received from the taxpayer
18 (or is treated under Paragraph (C)(3) of this Subsection as received from the
19 taxpayer):
20 (a) a son or daughter of the taxpayer, or a descendant of either,
21 (b) a stepson or stepdaughter of the taxpayer,
22 (c) a brother, sister, stepbrother, or stepsister of the taxpayer,
23 (d) the father or mother of the taxpayer, or an ancestor of either,
24 (e) a stepfather or stepmother of the taxpayer,
25 (f) a son or daughter of a brother or sister of the taxpayer,
26 (g) a brother or sister of the father or mother of the taxpayer,
27 (h) a son-in-law, daughter-in-law, father-in-law, mother-in-law,
28 brother-in-law, or sister-in-law of the taxpayer,
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1 (i) an individual who, for the taxable year of the taxpayer, has as his
2 principal place of abode the home of the taxpayer and is a member of the taxpayer's
3 household, or
4 (j) an individual who,
5 (i) is a descendant of a brother or sister of the father or mother of the
6 taxpayer,
7 (ii) for the taxable year of the taxpayer received institutional care required
8 by reason of a physical or mental disability, and
9 (iii) before receiving such institutional care, was a member of the same
10 household as the taxpayer.
11 (2) Rules relating to general definition. For purposes of this Section the rules
12 set forth below will apply.
13 (a) The terms "brother" and "sister" include a brother or sister by the
14 halfblood.
15 (b) In determining whether any of the relationships specified in this Section
16 exists, a child legally adopted by an individual shall be treated as if he were the child
17 of such individual by blood.
18 (c) The term "dependent" does not include any individual who is not a citizen
19 of the United States unless such individual is a resident of the United States, of a
20 country contiguous to the United States, of the Canal Zone, or of the Republic of
21 Panama. The preceding sentence shall not exclude from the definition of
22 "dependent" any child of the taxpayer born to him, or legally adopted by him, in the
23 Philippine Islands before January 1, 1956, if the child is a resident of the Republic
24 of the Philippines, and if the taxpayer was a member of the Armed Forces of the
25 United States at the time the child was born to him or legally adopted by him.
26 (d) A payment to a wife which is includible in the gross income of the wife
27 under R.S. 47:42(C) shall not be treated as a payment by her husband for the support
28 of any dependent.
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1 (3) Multiple support agreements. For purposes of Paragraph (C)(1) of this
2 Subsection, over half of the support of an individual for a calendar year shall be
3 treated as received from the taxpayer if:
4 (a) no one person contributed over half of such support;
5 (b) over half of such support was received from persons each of whom, but
6 for the fact that he did not contribute over half of such support, would have been
7 entitled to claim such individual as a dependent for a taxable year beginning in such
8 calendar year;
9 (c) the taxpayer contributed over ten per cent of such support; and
10 (d) each person described in Subparagraph (C)(3)(b) of this Section (other
11 than the taxpayer) who contributed over ten per cent of such support files a written
12 declaration (in such manner and form as the collector may by regulations prescribe)
13 that he will not claim such individual as a dependent for any taxable year beginning
14 in such calendar year.
15 (4) Special support test in case of students. Amounts received as
16 scholarships for study at an educational institution by an individual who is:
17 (a) a son, stepson, daughter, or stepdaughter of the taxpayer (within the
18 meaning of this Section), and
19 (b) a student, shall not be taken into account in determining whether such
20 individual received more than half of his support from the taxpayer.
21 D. Exception for certain heads of families. If the taxpayer would not occupy
22 the status of head of family except by reason of there being one or more dependents
23 for whom he would be entitled to credit under Subsection C above the credit under
24 such paragraph shall be disallowed with respect to one of such dependents.
25 E. Limitation on portion of credit deduction allowable. There shall be
26 allowed only that portion of the credits deductions set forth in the preceding
27 Subsections of this Section which the net income of the individual taxable under this
28 Chapter bears to the total net income of such individual.
29 * * *
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1 §293. Definitions
2 The following definitions shall apply throughout this Part, unless the context
3 requires otherwise:
4 * * *
5 (10) "Tax table income", for nonresident individuals, means the amount of
6 Louisiana income, as provided in this Part, allocated and apportioned under the
7 provisions of R.S. 47:241 through 247, plus the total amount of the personal
8 exemptions and deductions already included in the tax tables promulgated by the
9 secretary under authority of R.S. 47:295, less the proportionate amount of the federal
10 income tax liability, excess federal itemized personal deductions, the temporary
11 teacher deduction, the recreation volunteer and volunteer firefighter deduction, the
12 construction code retrofitting deduction, any gratuitous grant, loan, or other benefit
13 directly or indirectly provided to a taxpayer by a hurricane recovery entity if such
14 benefit was included in federal adjusted gross income, the exclusion provided for in
15 R.S. 47:297.3 for S Bank shareholders, the deduction for expenses disallowed by
16 I.R.C. Section 280C, the deduction for net capital gains, and personal exemptions
17 and deductions provided for in R.S. 47:294. The proportionate amount is to be
18 determined by the ratio of Louisiana income to federal adjusted gross income. When
19 federal adjusted gross income is less than Louisiana income, the ratio shall be one
20 hundred percent.
21 * * *
22 §295. Tax imposed on individuals; administration
23 * * *
24 B. The secretary shall establish tax tables that calculate the tax owed by
25 taxpayers based upon where their taxable income falls within a range that shall not
26 exceed two hundred fifty dollars. The secretary shall provide in the tax tables that
27 the combined personal exemption, standard deduction, and other exemption
28 deductions in R.S. 47:294 shall be deducted from the two percent bracket. If such
29 combined exemptions and deductions exceed the two percent bracket, the excess
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1 shall be deducted from the four percent bracket. If such combined exemptions and
2 deductions exceed the two and four percent brackets, the excess shall be deducted
3 from the six percent bracket.
4 * * *
5 Section 2. R.S. 47:293(3) and (9)(a)(xi) and 294 are hereby repealed in their entirety.
6 Section 3. The provisions of this Act shall be applicable to all taxable periods on and
7after January 1, 2017.
8 Section 4. This Act shall only take effect and become operative if and when the
9proposed amendment of Article VII of the Constitution of Louisiana contained in the Act
10which originated as House Bill No._________ of this 2016 Second Extraordinary Session
11of the Legislature is adopted at a statewide election and becomes effective and if the Act
12which originated as House Bill No. 33 from the 2016 Second Extraordinary Session of the
13Legislature is adopted by both Houses of the Legislature 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 17 Engrossed 2016 Second 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 and 6% on net income in excess of
$50,000 to 3.80% on net income in excess of $12,500.
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
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mean the amount by which the federal itemized personal deductions exceed the amount of
the 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, 2017.
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.
Present law authorizes a credit of $400 for each dependent who meets certain criteria and
authorizes an additional deduction of $1,000 for each allowable exemption in excess of those
required to qualify for the exemption allowable under present law.
Proposed law changes present law by specifying that as offset for the exemption of the first
$12,500 of net income from state income taxation, no taxpayer shall be allowed to claim the
personal exemptions and credits for individuals and dependents provided for in present law.
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. 7 of this 2016 2
nd
E.S. of the
Legislature is adopted at a statewide election and becomes effective, and if the Act which
originated as House Bill No. 33 of the 2016 Second Extraordinary Session is enacted into
law 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)
Summary of Amendments Adopted by House
The Committee Amendments Proposed by House Committee on Ways and Means to the
original bill:
1. Change the individual income tax rate provided for in proposed law to be
imposed on net income in excess of $12,500 from 3.95% to 3.80%.
2. Add effectiveness for proposed law contingent upon enactment of House Bill No.
33 of the 2016 Second Extraordinary Session.
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