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 262 Engrossed 2019 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 and 6% on net income in excess of $50,000 to
3.95% on net income in excess of $12,500.
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.
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. Excess federal itemized personal deductions is defined as 100% of the amount by which
the federal itemized personal deductions exceed the amount of the federal standard deduction
designated for the filing status used for the taxable period on the individual income tax return.
Proposed law changes present law to limit the expenses eligible to be claimed on a state return to
100% of the amount of qualified residence interest on a La. residence and 100% of the amount of
charitable contributions used by the taxpayer in the calculation of federal taxable income which
exceed the amount of the federal standard deduction.
Proposed law defines the terms "qualified residence interest" and "charitable contribution" to have
the meanings ascribed to them in federal law.
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 law authorizes an $18 per child tax credit for educational expenses incurred before Jan. 1,
2017, for each child attending kindergarten, elementary, or secondary school kindergarten through
twelfth grade located in La.. This credit is not applicable if the taxpayer claimed the deduction for
educational expenses provided for in present law for the child.
Proposed law repeals the $18 per child tax credit for educational expenses incurred before Jan. 1,
2017.
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 and estate and trust 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 and 6% on net income in excess of
$50,000 to 3.95% on La. taxable income in excess of $12,500.
Applicable to all taxable periods beginning on and after Jan. 1, 2020.
Effective on Jan. 1, 2020, if and when the proposed amendment of Article VII of the Constitution
of La. contained in the Act which originated as House Bill No. ___ of this 2019 R.S. of the
Legislature is adopted at a statewide election and becomes effective.
(Amends R.S. 47:32(A), 293(3), (9)(a)(iv), and (10), 294, 295(B), 300.1, 300.6(A), and 300.7(A);
Adds R.S. 47:293(3)(d) and (9)(a)(xviii); Repeals R.S. 47:293(4) and (9)(a)(ii), 296.1(B)(3)(c),
297(A) and (D)(2), and 298)
Summary of Amendments Adopted by House
The Committee Amendments Proposed by House Committee on Ways and Means to the original
bill:
1. Technical amendments to delete repetitive provisions regarding the personal exemption
and dependency deductions that were superceded by the enactment of newer provisions
in present law.
2. Technical amendments to clarify the elimination of the deductibility of federal income taxes paid.