LA
Louisiana House Bill HB205

Louisiana 2021 Regular Session

Louisiana House Bill HB205

Introduced
3/25/21  
Introduced
3/25/21  
Refer
3/25/21  
Refer
3/25/21  
Refer
4/12/21  

Caption

(Constitutional Amendment) Eliminates the mandatory corporation income tax deduction for federal income taxes paid (OR SEE FISC NOTE GF RV See Note)

Impact

The implications of HB 205 are significant for corporate taxation in Louisiana. By removing the mandatory deductibility of federal taxes for corporate entities, the state could potentially increase its tax revenue. This shift may lead to changes in how corporations perceive Louisiana as a business environment, either viewing it as more burdensome or as a fairer system depending on their tax strategies. Moreover, the proposed amendment aligns with efforts to modernize the tax structure, reflecting a growing trend among states to reassess tax policies relative to federal tax codes.

Summary

House Bill 205 proposes a constitutional amendment to amend Article VII, Section 4(A) of the Louisiana Constitution, specifically targeting the deductibility of federal income taxes paid when calculating state corporate income taxes. The bill aims to eliminate the mandatory deduction for corporations, thereby altering how corporate income is taxed at the state level. The proposed change is designed to take effect on January 1, 2023, impacting tax years beginning on or after that date. The measure would need to be approved by voters during a statewide election scheduled for November 8, 2022.

Sentiment

Sentiment around HB 205 appears mixed among stakeholders. Proponents argue that by eliminating the deduction, the state can ensure a broader tax base, potentially leading to more equitable tax contributions from corporations. On the other hand, critics express concerns that the change could disproportionately affect businesses, particularly those with lower profit margins who may rely significantly on federal deductions to mitigate state taxation. This debate encapsulates larger discussions about tax fairness and the balance between state revenue needs and fostering a favorable business climate.

Contention

The controversy surrounding HB 205 hinges on the potential economic repercussions for corporations operating within Louisiana. Critics fear that obfuscation of tax obligations could deter new businesses from entering the state or push current organizations to seek more favorable tax conditions elsewhere. Conversely, supporters argue that the proposed amendment will create a level playing field for all corporations and could be reinvested into state services or infrastructure. The outcome of the voting will ultimately reflect the electorate's priorities regarding taxation and economic development.

Companion Bills

No companion bills found.

Previously Filed As

LA HB275

(Constitutional Amendment) Eliminates the mandate for the corporation income tax deduction for federal income taxes paid (EG SEE FISC NOTE GF RV See Note)

LA HB8

(Constitutional Amendment) Eliminates the income tax deduction for federal income taxes paid (Item #17) (OR SEE FISC NOTE GF RV See Note)

LA HB369

(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)

LA HB207

(Constitutional Amendment) Provides for the rates and brackets for purposes of calculating income taxes and eliminates the mandatory deduction for federal income taxes paid for purposes of computing income taxes (EG SEE FISC NOTE GF RV See Note)

LA HB488

(Constitutional Amendment) Establishes the maximum rate for purposes of calculating individual income taxes and repeals the mandatory deduction for federal income taxes paid (OR SEE FISC NOTE GF RV See Note)

LA HB274

(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)

LA HB347

(Constitutional Amendment) Eliminates the deduction for federal income taxes paid for purposes of computing individual income taxes (OR SEE FISC NOTE See Note)

LA HB78

(Constitutional Amendment) Eliminates the income tax deduction for federal income taxes paid and provides for the maximum rate for individual income tax (Items #2, 3, 17, and 19) (EG SEE FISC NOTE GF RV See Note)

LA HB31

(Constitutional Amendment) Eliminates the income tax deduction for federal income taxes paid for purposes of calculating corporate income tax liability (Items #2 and 17) (EN SEE FISC NOTE GF RV See Note)

LA HB41

(Constitutional Amendment) Eliminates the income tax deduction for federal income taxes paid for purposes of computing individual and corporate income taxes (Items #2 and 17) (OR SEE FISC NOTE GF RV See Note)

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