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)]
CONFERENCE COMMITTEE REP ORT DIGEST
HB 18 2018 Second Extraordinary Session Jackson
Keyword and oneliner of the instrument as it left the House
TAX CREDITS: Provides relative to the individual income tax credit for taxes paid to other states
(Item #17)
Report adopts Senate amendments to:
1. Require the deduction to be based on a state's entity level tax that is based solely on net
income included in the entity's federal taxable income without any capital component.
2. Authorize the deduction only to the extent that the proportionate share of the related income
on the tax paid to the other state is included in the calculation of La. taxable income reported
on the La. return.
3. Increase the amount of the earned income tax credit from 3.5% to 5% of the federal earned
income tax credit amount.
Report rejects Senate amendments which would have:
1. Increased the amount of the earned income tax credit to 5% for tax years beginning on and
after Jan. 1, 2018, for any taxable year in which the state sales and use tax rate exceeds 4%.
Report amends the bill to:
1. Increase the amount of the earned income tax credit to 5% for tax years beginning on and
after Jan. 1, 2019, through December 31, 2025.
Digest of the bill as proposed by the Conference Committee
Present law authorizes an individual income tax credit in an amount equal to income taxes paid for
the same taxable period to another state on income that is subject to La. tax if the other state
authorizes a similar credit. Present law authorizes a credit for three years in an amount of the lesser of the actual amount of tax
paid to the other state or the amount of La. income tax that would have been imposed if the income
had been earned in La.
Present law provides for termination (sunset) in three years of those provisions of present law that
require the state to which income taxes were paid to authorize a similar credit and that the credit
amount be the lesser of the actual amount of tax paid to the other state or the amount of La. income
tax that would have been imposed if the income had been earned in La.
Proposed law extends the provisions of present law through June 30, 2023.
Proposed law prohibits the credit for tax paid on income that is not subject to tax in this state.
Further provides that the amount of the credit shall not exceed the ratio of La. income tax liability
before consideration of certain credits authorized in present law by a fraction, the numerator of
which is the taxpayer's La. tax table income attributable to other states to which net income taxes
were paid by a resident individual, and the denominator of which is total La. tax table income.
Proposed law provides that for taxes paid on or after Jan. 1, 2018, an individual partner, member,
or shareholder that pays another state's entity level tax that is based solely upon net income included
in the entity's federal taxable income without any capital component shall be allowed a deduction
equal to their proportionate share of the entity level tax paid.
Proposed law authorizes the deduction pursuant to proposed law only to the extent that the
proportionate share of the related income on the tax paid to the other state is included in the
calculation of La. taxable income reported on the La. return of the individual partner or member.
Present law provides for an individual income tax credit in an amount equal to 3.5% of the amount
of the taxpayer's federal earned income tax credit authorized under Section 32 of the Internal
Revenue Code.
Proposed law increases the amount of the state credit from 3.5% to 5% of the amount of the
taxpayers federal tax credit beginning Jan. 1, 2019, through Dec. 31, 2025.
Effective upon signature of governor or lapse of time for gubernatorial action.
(Amends R.S. 47:33(A)(5) and 297.8(A) and ยง4 of Act No. 109 of 2015 R.S.; Adds R.S.
47:33(A)(7))