HLS 17RS-356 REENGROSSED
2017 Regular Session
HOUSE BILL NO. 501
BY REPRESENTATIVE STOKES
TAX/INCOME TAX: Changes the rates and brackets for purposes of calculating individual
income tax liability and eliminates certain deductions and credits
1 AN ACT
2To amend and reenact R.S. 47:32(A), 79, 93(B), 241, 293(3) and (10), 294, 295(B), 300.1,
3 300.6(A), and 300.7(A), to enact R.S. 47:55(6) and 293(9)(a)(xviii), and to repeal
4 R.S. 47:55(5), 293(4) and (9)(a)(ii), 296.1(B)(3)(c), and 298, relative to the
5 individual income tax; to provide for the calculation of individual income tax
6 liability; to provide for the rates and brackets for individual income tax; to provide
7 for certain deductions and credits; to reduce certain deductions and credits; to reduce
8 the amount of the deduction allowed for excess federal itemized personal deductions
9 and personal exemptions and credits for dependents; to repeal the deductibility of
10 federal income taxes paid for purposes of calculating individual income tax; to
11 provide for applicability; to provide for effectiveness; and to provide for related
12 matters.
13Be it enacted by the Legislature of Louisiana:
14 Section 1. R.S. 47:32(A), 79, 93(B), 241, 293(3) and (10), 294, 295(B), 300.1,
15300.6(A), and 300.7(A) are hereby amended and reenacted and R.S. 47:55(6) and
16293(9)(a)(xviii) are hereby enacted to read as follows:
17 §32. Rates of tax
18 A. On individuals. The tax to be assessed, levied, collected and paid upon
19 the taxable income of an individual shall be computed at the following rates:
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1 (1) Two percent No tax shall be assessed on that portion of the first twelve
2 thousand five hundred dollars of net income which is in excess of the credits against
3 net income provided for in R.S. 47:79;.
4 (2) Four percent on the next thirty-seven thousand five hundred dollars of
5 net income;
6 (3) Six percent on any amount of net income in excess of fifty thousand
7 dollars of net income. Three and ninety-five one hundreths of one percent on net
8 income in excess of twelve thousand five hundred dollars.
9 * * *
10 §55. Deductions from gross income; taxes generally
11 In computing net income, there shall be allowed as deductions all taxes paid
12 or accrued within the taxable year except:
13 * * *
14 (6) Federal income taxes paid on individual income.
15 * * *
16 §79. Credits of individuals against net income
17 A. Personal exemption.
18 (1) An exemption of twenty-five hundred dollars is allowed for the taxpayer;
19 and an additional exemption of twenty-five hundred dollars is allowed for the spouse
20 of the taxpayer if a separate return is made by the taxpayer, and if the spouse has no
21 gross income and is not the dependent of another taxpayer for the calendar year in
22 which the taxable year of the taxpayer begins. A person who occupied status as head
23 of family during the entire taxable year is allowed an exemption of five thousand
24 dollars.
25 (2) In addition to the exemptions above provided for, an An exemption of
26 one thousand dollars is allowed for the taxpayer who is blind or who has sustained
27 the loss of one or more limbs or who has an intellectual disability or who is deaf. As
28 used herein the word "blind" shall mean and refer to persons who have been
29 determined by a qualified ophthalmologist or optometrist to have no vision or to
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1 have vision which is insufficient for use in an occupation or activity for which sight
2 is essential. a person who, after examination by a licensed physician skilled in
3 diseases of the eye or by a licensed optometrist, has been determined to have not
4 more than 20/200 central visual acuity in the better eye with correcting lenses, or an
5 equally disabling loss of the visual field as evidenced by a limitation to the field of
6 vision in the better eye to such a degree that its widest diameter subtends an angle
7 of no greater than twenty degrees. For purposes herein of this Subsection, the word
8 "deaf" shall be defined as in Paragraph (B)(5) Subsection B of this Section. Each
9 person claiming an exemption under the provisions of this Paragraph Section shall
10 be able to prove such claim by certificate of a qualified physician or optometrist.
11 B. Credit Deductions for dependents.
12 (1) In general. A credit of four hundred dollars is allowed for each
13 dependent (as defined in Subsection C of this Section),
14 (a) whose gross income for the calendar year in which the taxable year of the
15 taxpayer begins is less than $600 or
16 (b) who is a child of the taxpayer and who (i) has not attained the age of
17 nineteen at the close of the calendar year in which the taxable year of the taxpayer
18 begins, or (ii) is a student.
19 (2) Credit denied in case of certain married dependents. No credit is allowed
20 under this Subsection for any dependent who has made a joint return with his spouse
21 under R.S. 47:101(B), for the taxable year beginning in the calendar year in which
22 the taxable year of the taxpayer begins.
23 (3) Child defined. For purposes of this Subparagraph (B)(1)(b) of this
24 Subsection, the term "child" means an individual who (within the meaning of
25 Subsection C of this Section) is a son, stepson, daughter, or stepdaughter of the
26 taxpayer.
27 (4) Student and educational institution defined. For purposes of Item
28 (B)(1)(b)(ii) of this Subsection, the term "student" means an individual who during
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1 each of five calendar months during the calendar year in which the taxable year of
2 the taxpayer begins,
3 (a) is a full-time student at an educational institution; or
4 (b) is pursuing a full-time course of institutional on-farm training under the
5 supervision of an accredited agent of an educational institution or of a state or
6 political subdivision of a state. For purposes of this Subsection, the term
7 "educational institution" means only an educational institution which normally
8 maintains a regular faculty and curriculum and normally has a regularly organized
9 body of students in attendance at the place where its educational activities are carried
10 on.
11 (5) Credit for certain dependents. (1) A credit deduction of one thousand
12 dollars is allowed for each dependent as defined in Subsection C of this Section
13 allowed in determining federal income tax liability who is blind or deaf or who has
14 sustained the loss of one or more limbs or who has an intellectual disability. As
15 herein used the word "blind" shall be defined as in Paragraph (A)(2) Subsection A
16 of this Section. For purposes herein of this Subsection, the word "deaf" shall mean
17 and refer to persons whose hearing is so impaired that it is insufficient for use in an
18 occupation or activity for which hearing is essential. The taxpayer claiming credit
19 the deduction as herein provided provided in this Subsection shall be able to prove
20 such claim by certificate of a qualified physician or optometrist issued for each such
21 dependent for which a credit deduction is claimed.
22 (2) In addition to the deduction authorized in Paragraph (1) of this
23 Subsection, an additional deduction of one thousand dollars shall be allowed for each
24 dependent as allowed in determining federal income tax liability.
25 C. Dependent defined.
26 (1) General definition. For purposes of this Chapter, the term "dependent"
27 means any of the following individuals over half of whose support, for the calendar
28 year in which the taxable year of the taxpayer begins, was received from the taxpayer
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1 (or is treated under Paragraph (C)(3) of this Subsection as received from the
2 taxpayer):
3 (a) a son or daughter of the taxpayer, or a descendant of either,
4 (b) a stepson or stepdaughter of the taxpayer,
5 (c) a brother, sister, stepbrother, or stepsister of the taxpayer,
6 (d) the father or mother of the taxpayer, or an ancestor of either,
7 (e) a stepfather or stepmother of the taxpayer,
8 (f) a son or daughter of a brother or sister of the taxpayer,
9 (g) a brother or sister of the father or mother of the taxpayer,
10 (h) a son-in-law, daughter-in-law, father-in-law, mother-in-law,
11 brother-in-law, or sister-in-law of the taxpayer,
12 (i) an individual who, for the taxable year of the taxpayer, has as his
13 principal place of abode the home of the taxpayer and is a member of the taxpayer's
14 household, or
15 (j) an individual who,
16 (i) is a descendant of a brother or sister of the father or mother of the
17 taxpayer,
18 (ii) for the taxable year of the taxpayer received institutional care required
19 by reason of a physical or mental disability, and
20 (iii) before receiving such institutional care, was a member of the same
21 household as the taxpayer.
22 (2) Rules relating to general definition. For purposes of this Section the rules
23 set forth below will apply.
24 (a) The terms "brother" and "sister" include a brother or sister by the
25 halfblood.
26 (b) In determining whether any of the relationships specified in this Section
27 exists, a child legally adopted by an individual shall be treated as if he were the child
28 of such individual by blood.
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1 (c) The term "dependent" does not include any individual who is not a citizen
2 of the United States unless such individual is a resident of the United States, of a
3 country contiguous to the United States, of the Canal Zone, or of the Republic of
4 Panama. The preceding sentence shall not exclude from the definition of
5 "dependent" any child of the taxpayer born to him, or legally adopted by him, in the
6 Philippine Islands before January 1, 1956, if the child is a resident of the Republic
7 of the Philippines, and if the taxpayer was a member of the Armed Forces of the
8 United States at the time the child was born to him or legally adopted by him.
9 (d) A payment to a wife which is includible in the gross income of the wife
10 under R.S. 47:42(C) shall not be treated as a payment by her husband for the support
11 of any dependent.
12 (3) Multiple support agreements. For purposes of Paragraph (C)(1) of this
13 Subsection, over half of the support of an individual for a calendar year shall be
14 treated as received from the taxpayer if:
15 (a) no one person contributed over half of such support;
16 (b) over half of such support was received from persons each of whom, but
17 for the fact that he did not contribute over half of such support, would have been
18 entitled to claim such individual as a dependent for a taxable year beginning in such
19 calendar year;
20 (c) the taxpayer contributed over ten per cent of such support; and
21 (d) each person described in Subparagraph (C)(3)(b) of this Section (other
22 than the taxpayer) who contributed over ten per cent of such support files a written
23 declaration (in such manner and form as the collector may by regulations prescribe)
24 that he will not claim such individual as a dependent for any taxable year beginning
25 in such calendar year.
26 (4) Special support test in case of students. Amounts received as
27 scholarships for study at an educational institution by an individual who is:
28 (a) a son, stepson, daughter, or stepdaughter of the taxpayer (within the
29 meaning of this Section), and
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1 (b) a student, shall not be taken into account in determining whether such
2 individual received more than half of his support from the taxpayer.
3 D. Exception for certain heads of families. If the taxpayer would not occupy
4 the status of head of family except by reason of there being one or more dependents
5 for whom he would be entitled to credit under Subsection C above the credit under
6 such paragraph shall be disallowed with respect to one of such dependents.
7 E. Limitation on portion of credit deduction allowable. There shall be
8 allowed only that portion of the credits deductions set forth in the preceding
9 Subsections A and B of this Section which the net income of the individual taxable
10 under this Chapter bears to the total net income of such individual.
11 * * *
12 §93. Period for which deductions and credits shall be taken
13 * * *
14 B. The proper year in which to claim deductions for federal income and
15 excess profits taxes allowable under the provisions of R.S. 47:55 shall be determined
16 as follows, regardless of the method of accounting regularly employed by the
17 taxpayer:
18 (1) The amount of tax shown to be due upon the federal income tax return
19 of the corporation and fiduciary taxpayer, as filed, shall be allowed as a deduction
20 in on the state corporation and fiduciary income tax return for the same period as that
21 for which such federal return is filed.
22 (2) Federal income and excess profits taxes paid after the filing of the federal
23 return in addition to the amount disclosed to be due by the return as filed shall be
24 allowed as a deduction in on the state corporation and fiduciary income tax return for
25 that period if it is not prescribed. If it is prescribed, the deduction for such additional
26 taxes shall be allowed as a deduction in on the state return for the period in which
27 such additional tax is paid. This Subsection shall apply to all such payments after
28 December 31, 1973.
29 * * *
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1 §241. Net income subject to tax
2 A. The net income of a nonresident individual or a corporation subject to the
3 tax imposed by this Chapter shall be the sum of the net allocable income earned
4 within or derived from sources within this state, as defined in R.S. 47:243, and the
5 net apportionable income derived from sources in this state, as defined in R.S.
6 47:244, less the amount of federal income taxes attributable to the net allocable
7 income and net apportionable income derived from sources in this state. The amount
8 of federal income taxes to be so deducted shall be that portion of the total federal
9 income tax which is levied with respect to the particular income derived from
10 sources in this state to be computed in accordance with rules and regulations of the
11 collector of revenue. Proper adjustment shall be made for the actual tax rates
12 applying to different classes of income and for all differences in the computation of
13 net income for purposes of federal income taxation as compared to the computation
14 of net income under this Chapter. Where the allocation of the tax is to be based on
15 a ratio of the amount of net income of a particular class, both the numerator and the
16 denominator of the fraction used in determining the ratio shall be computed on the
17 basis that such net income is determined for federal income tax purposes.
18 B. The net income of a corporation subject to the tax imposed by this
19 Chapter shall be the sum of the net allocable income earned within or derived from
20 sources within this state, as defined in R.S. 47:243, and the net apportionable income
21 derived from sources in this state, as defined in R.S. 47:244, less the amount of
22 federal income taxes attributable to the net allocable income and net apportionable
23 income derived from sources in this state. The amount of federal income taxes to be
24 so deducted shall be that portion of the total federal income tax which is levied with
25 respect to the particular income derived from sources in this state to be computed in
26 accordance with rules and regulations of the collector of revenue. Proper adjustment
27 shall be made for the actual tax rates applying to different classes of income and for
28 all differences in the computation of net income for purposes of federal income
29 taxation as compared to the computation of net income under this Chapter. Where
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1 the allocation of the tax is to be based on a ratio of the amount of net income of a
2 particular class, both the numerator and the denominator of the fraction used in
3 determining the ratio shall be computed on the basis that such net income is
4 determined for federal income tax purposes.
5 * * *
6 §293. Definitions
7 The following definitions shall apply throughout this Part, unless the context
8 requires otherwise:
9 * * *
10 (3) "Excess federal itemized personal deductions" for the purposes of this
11 Part, means the following percentages one hundred percent of the amount by which
12 the federal itemized personal deductions, excluding Louisiana state income tax
13 refunds, exceed the amount of federal standard deductions which is designated for
14 the filing status used for the taxable period on the individual income tax return
15 required to be filed:. No deduction shall be allowed on the first twelve thousand five
16 hundred dollars of excess federal itemized personal deductions for filers using a
17 federal filing status of single, married filing single, or head of household and twenty-
18 five thousand dollars for taxpayers using a federal filing status of married filing joint
19 or qualifying widower with dependent child returns.
20 (a) For tax years beginning during calendar year 2007, fifty-seven and one
21 half percent of such excess federal itemized personal deductions.
22 (b) For tax years beginning during calendar year 2008, sixty-five percent of
23 such excess federal itemized personal deductions.
24 (c) For all tax years beginning on and after January 1, 2009, one hundred
25 percent of such excess federal itemized personal deductions.
26 * * *
27 (9)(a) "Tax table income", for resident individuals, means adjusted gross
28 income plus interest on obligations of a state or political subdivision thereof, other
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1 than Louisiana and its municipalities, title to which obligations vested with the
2 resident individual on or subsequent to January 1, 1980, and less:
3 * * *
4 (xviii) Louisiana state income tax refunds which are included in federal
5 adjusted gross income.
6 * * *
7 (10) "Tax table income", for nonresident individuals, means the amount of
8 Louisiana income, as provided in this Part, allocated and apportioned under the
9 provisions of R.S. 47:241 through 247, plus the total amount of the personal
10 exemptions and deductions already included in the tax tables promulgated by the
11 secretary under authority of R.S. 47:295, less the proportionate amount of the federal
12 income tax liability, excess federal itemized personal deductions, the temporary
13 teacher deduction, the recreation volunteer and volunteer firefighter deduction, the
14 construction code retrofitting deduction, any gratuitous grant, loan, or other benefit
15 directly or indirectly provided to a taxpayer by a hurricane recovery entity if such
16 benefit was included in federal adjusted gross income, the exclusion provided for in
17 R.S. 47:297.3 for S Bank shareholders, the deduction for expenses disallowed by
18 I.R.C. Section 280C, the deduction for net capital gains, Louisiana state income tax
19 refunds which are included in federal adjusted gross income, and personal
20 exemptions and deductions provided for in R.S. 47:294. The proportionate amount
21 is to be determined by the ratio of Louisiana income to federal adjusted gross
22 income. When federal adjusted gross income is less than Louisiana income, the ratio
23 shall be one hundred percent.
24 * * *
25 §294. Filing status; personal Personal exemptions; and credit for dependents
26 All personal exemptions and deductions for dependents allowed in
27 determining federal income tax liability, including the extra exemption for the blind
28 and aged, will be allowed in determining the tax liability in this Part. Taxpayers are
29 required to use the same filing status and claim the same exemptions on their return
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1 required to be filed under this Part as they used on their federal income tax return.
2 The amounts to be taken into consideration shall be as follows:
3 A. A combined personal exemption and standard deduction in the following
4 amounts:
5 a. Single Individual$ 4500.00
6 b. Married-Joint Return and a Qualified Surviving Spouse$ 9000.00
7 c. Married-Separate$ 4500.00
8 d. Head of Household$ 9000.00
9 B. An additional deduction of one thousand dollars shall be allowed for each
10 allowable exemption in excess of those required to qualify for the exemption
11 allowable under R.S. 47:294(A).
12 A. Personal Exemption. An exemption of one thousand dollars shall be
13 allowed for the taxpayer who is blind or who has sustained the loss of one or more
14 limbs or who has an intellectual disability or who is deaf. As used in this Section,
15 the term "blind" shall mean and refer to a person who, after examination by a
16 licensed physician skilled in diseases of the eye or by a licensed optometrist, has
17 been determined to have not more than 20/200 central visual acuity in the better eye
18 with correcting lenses, or an equally disabling loss of the visual field as evidenced
19 by a limitation to the field of vision in the better eye to such a degree that its widest
20 diameter subtends an angle of no greater than twenty degrees. The term "deaf" shall
21 be defined as in Subsection B of this Section. Each person claiming an exemption
22 under the provisions of this Section shall be able to prove a claim by certificate of
23 a qualified physician or optometrist.
24 B. Deductions for dependents. (1) A deduction of one thousand dollars shall
25 be allowed for each dependent allowed, in determining federal income tax liability,
26 who is blind or deaf or who has sustained the loss of one or more limbs or who has
27 an intellectual disability. For purposes of this Section, the word "deaf" shall mean
28 and refer to persons whose hearing is so impaired that it is insufficient for use in an
29 occupation or activity for which hearing is essential. The term "blind" shall be
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1 defined as in Subsection A of this Section. The taxpayer claiming the deduction
2 authorized in this Subsection shall be able to prove a claim by certificate of a
3 qualified physician or optometrist issued for each dependent for which a deduction
4 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. Limitation on portion of deduction allowable. There shall be allowed only
9 that portion of the deductions set forth in this Section which the net income of the
10 individual taxable under this Chapter bears to the total net income of the individual.
11 §295. Tax imposed on individuals; administration
12 * * *
13 B. The secretary shall establish tax tables that calculate the tax owed by
14 taxpayers based upon where their taxable income falls within a range that shall not
15 exceed two hundred fifty dollars. The secretary shall provide in the tax tables that
16 the combined personal exemption, standard deduction, and other exemption
17 deductions in R.S. 47:294 shall be deducted from the two percent bracket. If such
18 combined exemptions and deductions exceed the two percent bracket, the excess
19 shall be deducted from the four percent bracket. If such combined exemptions and
20 deductions exceed the two and four percent brackets, the excess shall be deducted
21 from the six percent bracket.
22 * * *
23 §300.1. Tax imposed
24 There is imposed an income tax for each taxable year upon the Louisiana
25 taxable income of every estate or trust, whether resident or nonresident. The tax to
26 be assessed, levied, collected, and paid upon the Louisiana taxable income of an
27 estate or trust shall be computed at the following rates:
28 (1) Two percent on the first ten thousand dollars No tax shall be assessed on
29 the first twelve thousand five hundred dollars of Louisiana taxable income.
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1 (2) Four percent on the next forty thousand dollars of Louisiana taxable
2 income.
3 (3) Six percent on Louisiana taxable income in excess of fifty thousand
4 dollars. Three and ninety-five one hundredths of one percent on Louisiana taxable
5 income in excess of twelve thousand five hundred dollars.
6 * * *
7 §300.6. Louisiana taxable income of resident estate or trust
8 A. Definition. "Louisiana taxable income" of a resident estate or trust means
9 the taxable income of the estate or trust determined in accordance with federal law
10 for the same taxable year, as specifically modified by the provisions contained in
11 Subsection B of this Section, less a federal income tax deduction to be computed
12 following the provisions of R.S. 47:287.83 and 287.85. in accordance with the
13 following provisions:
14 (1) In computing Louisiana taxable income, no federal income tax deduction
15 shall be allowed on net income upon which no Louisiana income tax has been
16 incurred, or upon which, for any reason whatsoever, no Louisiana income tax will
17 be paid. When computing Louisiana taxable income, the secretary may consider
18 reductions to the federal income tax deduction in accordance with the provisions of
19 this Paragraph.
20 (2) The alternative minimum tax is a federal income tax deductible to the
21 extent that it is applicable to regular federal taxable income. Any alternative
22 minimum tax paid on tax preference items shall not be deductible. In accordance
23 with the provisions of this Paragraph, the secretary may determine the deductible
24 portion of the alternative minimum tax.
25 (3) For purposes of this Section, federal income taxes shall include taxes
26 based on net income, accumulated earnings, war profits, excess profits, personal
27 holding company income, and tax from recomputation of investment credit. For
28 purposes of federal income taxation as compared to the computation of net income
29 under this Part, proper adjustment shall be made for the actual tax rates as applied
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1 to different classes of income and for all differences in the computation of net
2 income. The amount of the federal income tax deduction shall be that portion of the
3 total federal income tax, after application of all credits, which is levied on income
4 derived solely from sources in this state as computed under the rules and regulations
5 prescribed by the secretary.
6 (4) As used in this Subsection, the term "credits" shall not include
7 overpayments of prior year taxes allowed as a credit, estimated tax payments or
8 similar prepayments, credit for prior year alternative minimum tax that is allowed as
9 a credit against the current regular federal income tax, or federal income tax credits
10 determined by the secretary to be presidential disaster area disaster relief credits.
11 * * *
12 §300.7. Louisiana taxable income of nonresident estate or trust
13 A. Definition. "Louisiana taxable income" of a nonresident estate or trust
14 means such the portion of the taxable income of the nonresident estate or trust
15 determined in accordance with federal law for the same taxable year, as specifically
16 modified by the provisions contained in Subsection C of this Section, that was earned
17 within or derived from sources within this state, less a federal income tax deduction
18 to be computed following the provisions of R.S. 47:287.83 and 287.85 R.S. 47:300.6.
19 * * *
20 Section 2. R.S. 47:55(5), 293(4) and (9)(a)(ii), 296.1(B)(3)(c), and 298 are hereby
21repealed in their entirety.
22 Section 3. Notwithstanding the provisions of Section 8 of Act No. 125 of the 2015
23Regular Session of the Legislature, R.S. 47:297(D)(2) as enacted by Section 5 of Act No.
24125 of the 2015 Regular Session shall not become effective.
25 Section 4. The provisions of this Act shall be applicable to all taxable periods
26beginning on and after January 1, 2018.
27 Section 5. This Act shall become effective on January 1, 2018, if the proposed
28amendment of Article VII of the Constitution of Louisiana contained in the Act which
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1originated as House Bill No. 353 of this 2017 Regular Session of the Legislature is approved
2at 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 501 Reengrossed 2017 Regular Session Stokes
Abstract: Changes the rates and brackets for purposes of calculating individual income tax
liability and estates and trusts income tax liability, eliminates the standard and
certain dependency deductions, and modifies 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 reduces 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 3.95% on net income in excess of
$25,000.
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.
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 present law. (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.
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HB NO. 501
Proposed law deletes the provisions authorizing the combined personal exemption, standard
deduction, and other exemption deductions to be deducted from the income tax brackets.
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 changes present law by prohibiting this deduction on the first $12,500 of
excess federal itemized personal deductions for single filers and $25,000 for taxpayers filing
joint returns. Proposed law also excludes state income taxes paid by a taxpayer from
inclusion as a federal itemized deduction for purposes of this state deduction.
Present law defines "tax table income" for resident individuals as the adjusted gross income
plus interest on certain state or political subdivision obligations less items such as gratuitous
grants, loans, or other disaster benefits included in federal adjusted gross income, federal
income tax liability, amount deposited into medical or educational savings accounts, and
excess personal exemptions and deductions.
Proposed law retains present law but adds to the list of income not included in "tax table
income" state income tax refunds which are included in federal adjusted gross income.
Present constitution and present law authorize a state deduction for federal income taxes paid
for purposes of computing income taxes for the same period.
Proposed law repeals the present law provisions that authorize a state deduction for federal
income taxes paid for purposes of calculating individual income taxes.
Present law provides for the computation of La. taxable income for a resident estate or trust,
including provisions for the federal income tax deduction, limitations of deductions for net
income, provisions for the federal deduction for alternative minimum tax, and the authority
of the secretary of the Dept. of Revenue to consider reductions to the federal income tax
deduction and the determination of the deductible portion of an alternative minimum tax.
Proposed law retains present law except as it applies to the deductibility of federal income
taxes.
Present law provides for a tax to be assessed, levied, collected, and paid on the La. taxable
income of an estate or trust at the following rates:
(1)2% on the first $10,000 of La. taxable income.
(2)4% on the next $40,000 of La. taxable income.
(3)6% on La. taxable income in excess of $50,000.
Proposed law changes income tax rates on estates and trusts as follows:
(1)From 2% on the first $10,000 of La. taxable income to 0% on the first $12,500 of La.
taxable income.
(2)From 4% on the next $40,000 of La. taxable income to 3.95% on La. taxable income
in excess of $12,500.
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CODING: Words in struck through type are deletions from existing law; words underscored
are additions. HLS 17RS-356 REENGROSSED
HB NO. 501
Applicable to all taxable periods beginning on and after Jan. 1, 2018.
Effective on Jan. 1, 2018, if and when the proposed amendment of Article VII of the
Constitution of La. contained in the Act which originated as House Bill No. 353 of this 2017
R.S. of the Legislature is adopted at a statewide election and becomes effective.
(Amends R.S. 47:32(A), 79, 93(B), 241, 293(3), and (10), 294, 295(B), 300.1, 300.6(A), and
300.7(A); Adds R.S. 47:55(6) and 293(9)(a)(xviii); Repeals R.S. 47:55(5), 293(4) and
(9)(a)(ii), 296.1(B)(3)(c), and 298)
Summary of Amendments Adopted by House
The Committee Amendments Proposed by House Committee on Ways and Means to the
original bill:
1. Delete the repeal of the educational tax credit from proposed law.
2. Delete the repeal of the La. Citizens Property Insurance Corporation Assessment
tax credit from proposed law.
3. Make technical changes.
The House Floor Amendments to the engrossed bill:
1. Clarify the filing status of the taxpayer eligible to claim the state deduction for
federal excess itemized personal deductions.
2. Add limitation to the exclusion of state income tax refunds from the calculation
of "tax table income" for both residents and nonresidents to clarify that the
exclusion applies to state income tax refunds which are included in federal
adjusted gross income.
3. Delete present law provisions regarding personal and standard deductions for
purposes of calculating individual income tax liability.
4. Change the income tax rates for estates and trusts from a graduated system of
rates and brackets to a flat tax of 3.95% on La. taxable income in excess of
$12,500.
5. Make technical changes.
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CODING: Words in struck through type are deletions from existing law; words underscored
are additions.