Louisiana House Bill HB357

Louisiana 2017 Regular Session

• Introduced: 3/31/17
• Refer: 3/31/17
• Refer: 4/10/17
• Report Pass: 5/8/17

Caption

Repeals the state income tax deduction for federal income taxes paid for purposes of calculating corporate income tax (EG SEE FISC NOTE GF RV)

Impact

If enacted, HB 357 will significantly alter existing tax calculations for corporations by eliminating a common deduction that has been available to them. By doing so, the bill is expected to increase state tax revenues, as corporations will no longer benefit from reducing their taxable income with the federal tax deduction. This shift could potentially make Louisiana's corporate taxation structure less competitive compared to other states that still allow such deductions. The effectiveness of this bill is contingent upon the passage of related legislative measures, which aim to further modify tax regulations in the state.

Summary

House Bill 357 repeals the state income tax deduction for federal income taxes paid, specifically for the purposes of calculating corporate income tax. This change aims to modify the way corporate income taxes are computed within the state of Louisiana, removing the ability of corporations to deduct federal taxes from their taxable income at the state level. The proposed changes are positioned as part of a broader tax reform effort that seeks to streamline the taxation process and adjust the financial responsibilities of corporations operating within the state.

Sentiment

The sentiment surrounding HB 357 is mixed, with supporters arguing that the elimination of the federal tax deduction will lead to increased state revenue, which could be redirected towards public services and infrastructure. Critics, primarily from business communities, view this bill as an unfair burden on corporations, arguing that it complicates tax liability and could lead to reduced investment in the state. The fiscal implications and competitive position of Louisiana in attracting businesses are prominent points of contention in the ongoing discussion about the bill’s impact.

Contention

One notable point of contention within discussions of HB 357 is the potential disparity in how it impacts different sizes of businesses. Larger corporations, which typically have more resources, may be better equipped to manage the changes introduced by this bill, while smaller businesses could struggle with the increased tax liabilities. Additionally, concerns have been raised about the overall transparency of how the potential increases in state revenue will be utilized, with calls for clear commitments on reinvesting those funds into community development and economic growth initiatives.