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 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.