Eliminates the deductibility of federal income taxes paid for purposes of calculating state individual income tax
Impact
If enacted, HB630 would impact the personal financial situations of many Louisiana residents. Without the ability to deduct federal taxes from their state taxable income, individuals could potentially see an increase in their state tax liability. This change is posited to simplify the tax calculation process; however, it may disproportionately affect lower and middle-income earners who utilize the federal deduction more than higher income individuals.
Summary
House Bill 630 seeks to amend Louisiana's income tax laws by eliminating the deductibility of federal income taxes paid when calculating state individual income taxes. The bill outlines that individuals will no longer be able to reduce their taxable income by the amount of federal income tax paid, which represents a significant shift in tax policy. The proposal stipulates that these changes would apply to all taxable periods beginning January 1, 2018, pending a related constitutional amendment being adopted in a statewide election.
Sentiment
The sentiment surrounding HB630 is mixed, reflecting a divide among lawmakers and constituents. Proponents argue that eliminating the deduction could create a more equitable tax system and streamline tax policies statewide. Conversely, opponents are concerned about the increased tax burden on individuals and the potential economic strain this may place on families already facing financial difficulties.
Contention
A notable point of contention regarding HB630 is its relation to proposed constitutional amendments affecting state tax policy. Some legislators worry that enacting this bill without broader tax reform and adequate public consultation may lead to unintended consequences for the state's fiscal health. Additionally, discussions during legislative sessions have highlighted concerns regarding fairness and the implication of increased taxes for certain demographics within Louisianan society.
Repeals the state income tax deduction for federal income taxes paid for purposes of calculating individual and corporate income taxes (Item #17) (OR +$374,000,000 GF RV See Note)
Repeals the state income tax deduction for federal income taxes paid for purposes of calculating individual and corporate income taxes (Item #17) (RE1 SEE FISC NOTE GF RV See Note)
Repeals the state income tax deduction for federal income taxes paid for purposes of calculating corporate income taxes (Item #17) (EG +$22,000,000 GF RV See Note)
Requests that the Bd. of Regents and the State Bd. of Elementary and Secondary Education, with the Taylor Foundation, La. Office of Student Financial Assistance, public postsecondary education management boards, and certain others, study certain issues relative to TOPS
Requests the Louisiana Workforce Commission and the Louisiana Department of Veterans Affairs to study employment practices and professional licensing requirements to benefit veterans in the workforce
Creates a task force to study meaningful oversight of the professional healthcare licensing boards statutorily created within the Department of Health and Hospitals.