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 233 Original 2021 Regular Session Wright
Abstract: Changes the rates and brackets for purposes of calculating individual income tax liability
from a graduated rate system to a single flat rate of 3%, eliminates the deduction for excess
federal itemized personal deductions and the deduction for federal income taxes paid, and
increases the amount of the earned income tax credit.
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 removes the graduated schedule of rates in favor of a flat 3% individual income tax
rate.
Present law provides that in cases where taxpayers file a joint return of husband and wife, the
combined tax shall be twice the combined tax of single filers.
Proposed law retains present law.
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 increases the combined personal exemption to $10,000 for single, individual filers
and married, separate filers. Also increases the exemption to $20,000 for married, joint filers,
qualified surviving spouses, and filers who are the head of household.
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)).
Proposed law provides an exemption of $1,000 for a taxpayer who is blind, is deaf, has sustained the
loss of one or more limbs, or has an intellectual disability. Provides a deduction of $1,000 for each
dependent allowed, in determining federal income tax liability, who is blind, is deaf, has sustained
the loss of one or more limbs, or has an intellectual disability. Additionally, provides a deduction
of $1,000 for each dependent as allowed in determining federal income tax liability. Provides
definitions and requirements for claiming the exemptions.
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.
Proposed law retains present law. Present law 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 repeals present law.
Present law authorizes a deduction from individual income taxes for excess federal itemized personal
deductions. The term "excess federal itemized personal deductions" is defined to mean the amount
by which the federal itemized personal deductions exceed the amount of federal standard deduction
designated for the filing status used for the taxable period on the individual income tax return.
Proposed law repeals the deduction for excess federal itemized personal deductions beginning Jan.
1, 2023.
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 corporate income taxes and income taxes for
estates and trusts.
Present law provides for an individual income tax credit based on the taxpayer's federal earned
income tax credit authorized under Section 32 of the Internal Revenue Code. The amount of the
credit shall equal 5% of the amount of the taxpayer's federal earned income tax credit through Dec.
31, 2025. Beginning Jan. 1, 2026, the amount of the credit shall equal 3.5% of the amount of the
taxpayer's federal earned income tax credit.
Proposed law increases the amount of the state credit from 5% to 10% of the amount of the taxpayers
federal tax credit and makes the amount of the credit permanent.
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.
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 removes the graduated schedule of rates in favor of a flat 3% rate on taxable income
of an estate or trust.
Applicable to taxable periods beginning on or after Jan. 1, 2023.
Effective Jan. 1, 2023, if the proposed amendment of Article VII of the Constitution of La. contained
in the Act which originated as House Bill No. ___ of this 2021 R.S. of the Legislature is adopted at
a statewide election and becomes effective.
(Amends R.S. 47:32(A), 241, 287.69, 293(3) and (10), 294, 295(B), 297.8(A), 300.1, 300.6, and
300.7; Repeals R.S. 47:79, 287.79, 287.83, 287.85, 287.442(B)(1), 293(4) and (9)(a)(ii),
296.1(B)(3)(c), 297(A), and 298)