LA
Louisiana House Bill HB370

Louisiana 2017 Regular Session

Louisiana House Bill HB370

Introduced
3/31/17  
Introduced
3/31/17  
Refer
3/31/17  
Refer
3/31/17  

Caption

(Constitutional Amendment) Provides for a flat tax on business income and eliminates the income tax deduction for federal income taxes paid for purposes of calculating the tax liability of taxpayers who file returns on business income

Impact

If enacted, the new structure would have significant implications for state tax laws, particularly affecting how businesses calculate their tax responsibilities. By eliminating the federal tax deduction, businesses may see an increase in their taxable income, depending on their specific circumstances and the flat rate set by the law. The shift to a flat rate could provide more predictability for businesses concerning their tax obligations, encouraging more comprehensive financial planning and investment decisions within the state.

Summary

House Bill 370 seeks to amend the Louisiana Constitution to implement a flat tax on business income while simultaneously eliminating the current deductibility of federal income taxes paid for the purpose of calculating state corporate income tax liability. This legislative change aims to streamline tax calculations for businesses operating in Louisiana by establishing a uniform tax structure. The bill proposes to replace the existing graduated tax rates with a single flat rate, simplifying the tax system and potentially making the state more attractive for business investment.

Sentiment

The sentiment surrounding HB 370 appears to be mixed. Proponents argue that the changes will simplify the tax system and potentially lower the overall tax burden for businesses, fostering a more conducive environment for economic growth. On the other hand, critics express concerns regarding the loss of the federal tax deduction, fearing it could lead to higher tax liabilities for businesses, particularly smaller ones that may struggle to absorb the additional costs. This dual perspective reflects a broader debate about the balance between encouraging business growth and ensuring fair tax practices.

Contention

Notable points of contention regarding HB 370 arise from the implications associated with removing the federal tax deduction while instituting a flat tax. Opponents argue that this could disproportionately affect small businesses, highlighting the risk that it may lead to a higher effective tax rate for those that previously benefited from the federal deduction. Supporters counter that the flat rate simplifies taxation and could attract new businesses to the state, ultimately benefiting the economy. The discussion indicates a significant ideological divide regarding tax policy and its impact on business viability in Louisiana.

Companion Bills

No companion bills found.

Previously Filed As

LA HB356

(Constitutional Amendment) Provides for flat income tax rates and eliminates the income tax deduction for federal income taxes paid for purposes of calculating corporate income tax liability (RE SEE FISC NOTE See Note)

LA HB95

(Constitutional Amendment) Eliminates the income tax deduction for federal income taxes paid for purposes of calculating corporate income tax liability

LA HB371

(Constitutional Amendment) Provides for a flat tax on individual income and eliminates the income tax deduction for federal income taxes paid for purposes of computing individual income taxes (OR SEE FISC NOTE See Note)

LA HB369

(Constitutional Amendment) Provides for a flat tax on individual income and eliminates the mandatory income tax deduction for federal income taxes paid for purposes of computing income taxes (RE SEE FISC NOTE GF RV See Note)

LA HB206

(Constitutional Amendment) Provides for the rates and brackets for purposes of calculating income taxes and eliminates the mandatory income tax deduction for federal income taxes paid for purposes of computing income taxes

LA HB441

(Constitutional Amendment) Provides for a flat tax on individual income and eliminates the income tax deduction for federal income taxes paid for purposes of computing individual, estate and trust, and corporate income taxes (RE NO IMPACT GF RV See Note)

LA HB31

(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)

LA HB260

(Constitutional Amendment) Eliminates the income tax deduction for federal income taxes paid for purposes of calculating individual and corporate income taxes and requires the levy of a flat individual income tax rate (RE NO IMPACT GF RV See Note)

LA HB258

(Constitutional Amendment) Eliminates the deduction for federal income taxes paid for purposes of calculating individual and corporate income tax (OR SEE FISC NOTE)

LA HB418

Eliminates the deductibility of federal income taxes paid for purposes of calculating state individual income tax

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