(Constitutional Amendment) Prohibits the levy of tax on net incomes and provides for state taxes on the assessed value of property (OR DECREASE GF RV See Note)
Impact
The proposed amendment would lead to a fundamental shift in how state revenues are generated, as the elimination of income taxes would likely necessitate alternative sources of funding. Local governments would still retain the power to levy property taxes, but without state benchmarks, the local tax landscape could become less predictable. This shift may prompt discussions around revenue adequacy and government funding for essential services, particularly in education and infrastructure, which traditionally rely on income tax revenues.
Summary
House Bill 203 proposes a significant change to the state constitution of Louisiana by prohibiting the levy of taxes on net incomes. The bill seeks to eliminate the state’s ability to impose income taxes, accompanying this with a requirement that tax rates on property be set by law, removing previous limitations on state property tax millage rates. If passed, the bill would amend Article VII, Sections 4(A) and 19 of the Louisiana Constitution, potentially impacting tax revenues and the state’s fiscal structure starting January 1, 2023.
Sentiment
The sentiment around HB 203 appears mixed, with proponents arguing that such a move could encourage economic growth and attract businesses to Louisiana by creating a more favorable tax environment. However, critics express concern that the removal of income taxes could disproportionately benefit wealthier individuals while undermining the state’s ability to fund public services adequately. This has led to debates about equity, revenue stability, and the overall implications for state governance.
Contention
Key points of contention in the discussions surrounding HB 203 include the potential loss of revenue for the state and local governments, which could adversely affect public services and infrastructure projects. Opponents of the bill raise alarms about the risks associated with relying solely on property taxes, which may not be sufficient to meet the community's needs. Furthermore, as Louisiana navigates economic challenges, the long-term effects of such a tax structure could evoke significant concern among residents and policymakers alike.
(Constitutional Amendment) Repeals provision authorizing the state to levy a tax on net incomes and adds a provision prohibiting the state from levying a tax upon the income of individuals or corporations (OR -$943,000,000 GF RV See Note)
(Constitutional Amendment) Provides for a flat tax on individual income and eliminates the mandatory income tax deduction for federal income taxes paid for purposes of computing income taxes (RE SEE FISC NOTE GF RV See Note)
(Constitutional Amendment) Provides for the rates and brackets for purposes of calculating income taxes and limits the mandatory deduction for federal income taxes paid to corporate income taxes (RE1 SEE FISC NOTE GF RV See Note)
(Constitutional Amendment) Limits the amount of the increase in the assessed value of certain immovable property in Orleans Parish following reassessment of property for purposes of ad valorem taxes (EN SEE FISC NOTE LF RV)
(Constitutional Amendment) Eliminates the mandate for the corporation income tax deduction for federal income taxes paid (EG SEE FISC NOTE GF RV See Note)
Increases gross income tax relief based on rent constituting property taxes for residential tenants and establishes refundable gross income tax credit in place of gross income tax deduction for residential tenants.
Increases gross income tax relief based on rent constituting property taxes for residential tenants and establishes refundable gross income tax credit in place of gross income tax deduction for residential tenants.
Increases gross income tax relief based on rent constituting property taxes for residential tenants and establishes refundable gross income tax credit in place of gross income tax deduction for residential tenants.
Increases gross income tax relief based on rent constituting property taxes for residential tenants and establishes refundable gross income tax credit in place of gross income tax deduction for residential tenants.
Increases, from 18 percent to 30 percent, amount of rental payments defined as rent constituting property taxes for purposes of deduction from gross income for property tax payments.