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2018 First Extraordinary Session
SENATE BILL NO. 1
BY SENATOR MORRELL
TAX/TAXATION. Eliminates sunset provision on credit for taxes paid in other states. (Item
#5)(gov sig)
1 AN ACT
2 To amend and reenact Section 4 of Act No. 109 of the 2015 Regular Session of the
3 Legislature and R.S. 47:33(A)(5), to enact R.S. 47:33(A)(7), and to repeal Section
4 2 of Act No. 109 of the 2015 Regular Session of the Legislature, relative to tax
5 credits; to provide with respect to the individual income tax credit for taxes paid to
6 other states; to eliminate the termination of limitations previously enacted; to provide
7 for an effective date; and to provide for related matters.
8 Be it enacted by the Legislature of Louisiana:
9 Section 1. Section 4 of Act No. 109 of the 2015 Regular Session of the Legislature
10 is hereby amended and reenacted to read as follows:
11 Section 4. The provisions of Sections 1 and 3 1, 3, and 4 of this Act shall
12 become effective on July 1, 2015, and shall remain effective through June 30, 2018,
13 at which time the provisions of Sections 1 and 3 of this Act shall become null, void,
14 and of no effect. The provisions of Section 4 of this Act shall become effective on
15 July 1, 2015. The provisions of Section 2 of this Act shall become effective on July
16 1, 2018.
17 Section 2. Section 2 of Act No. 109 of the 2015 Regular Session of the Legislature
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Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions. SB NO. 1
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1 is hereby repealed in its entirety.
2 Section 3. R.S. 47:33(A)(5) is hereby amended and reenacted and R.S. 47:33(A)(7)
3 is hereby enacted to read as follows:
4 ยง33. Credit for taxes paid in other states
5 A. Subject to the following conditions, resident individuals shall be allowed
6 a credit against the taxes imposed by this Chapter for net income taxes imposed by
7 and paid to another state on income taxable under this Chapter, provided that:
8 * * *
9 (5)(a)The credit shall be limited to the amount of Louisiana income tax that
10 would have been imposed if the income earned in the other state had been earned in
11 Louisiana.
12 (b) The credit shall not exceed the proportion of the net income tax
13 payable under this Chapter as the income subject to tax in the other state and
14 also taxable under this Chapter bears to the taxpayer's entire income upon
15 which the net income tax is imposed by this Chapter.
16 * * *
17 (7) For taxes paid on or after January 1, 2018, an individual partner or
18 member who pays another state's entity level tax that does not have a capital
19 component shall be allowed a deduction of their proportionate share of the
20 entity level tax paid.
21 Section 4. This Act shall become effective upon signature by the governor or, if not
22 signed by the governor, upon expiration of the time for bills to become law without signature
23 by the governor, as provided by Article III, Section 18 of the Constitution of Louisiana. If
24 vetoed by the governor and subsequently approved by the legislature, this Act shall become
25 effective on the day following such approval.
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Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions. SB NO. 1
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The original instrument was prepared by Leonore F. Heavey. The following
digest, which does not constitute a part of the legislative instrument, was
prepared by James Benton.
DIGEST
SB 1 Engrossed 2018 First Extraordinary Session Morrell
Present law provides for limitations to the individual income tax credit for taxes paid to
another state and sunsets the limitations on June 30, 2018.
Proposed law repeals the sunset date and makes the limitations permanent.
Present law provides that the credit for taxes paid in other states shall be limited to the
amount of Louisiana income tax that would have been imposed if the income earned in the
other state had been earned in Louisiana.
Proposed law retains present law but provides that the credit shall not exceed the proportion
of the net income tax payable under present law as the income subject to tax in the other
state and also taxable under present law bears to the taxpayer's entire income upon which the
net income tax is imposed by present law.
Proposed law retains present law and further provides that for taxes paid on or after January
1, 2018, an individual partner or member who pays another state's entity level tax that does
not have a capital component shall be allowed a deduction of their proportionate share of the
entity level tax paid.
Effective upon signature of the governor or lapse of time for gubernatorial action.
(Amends R.S. 47:33(A)(5) and Section 4 of Act 109 of 2015 R.S.; adds R.S. 47:33(A)(7);
repeals Section 2 of Act 109 of 2015 R.S.)
Summary of Amendments Adopted by Senate
Committee Amendments Proposed by Senate Committee on Revenue and Fiscal
Affairs to the original bill
1. Provides that the credit shall not exceed the proportion of the net income tax
payable under Louisiana law.
2. Provides a deduction for another state's entity level tax that does not have a
capital component.
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Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions.