(Constitutional Amendment) Eliminates the mandate for the corporation income tax deduction for federal income taxes paid (EG SEE FISC NOTE GF RV See Note)
Impact
The elimination of this federal income tax deduction is expected to result in an increase in the taxable income for corporations subject to Louisiana's corporate income tax. By removing this deduction, corporations may face higher tax liabilities, thereby affecting their financial planning and operational decisions. Proponents argue this could lead to increased revenue for the state, which might be used for public services or to offset budget deficits. However, critics warn that higher corporate taxes could deter investment and stifle economic growth in the state.
Summary
House Bill 275 proposes a constitutional amendment to eliminate the mandatory deductibility of federal income taxes paid when computing state corporate income taxes in Louisiana. This change would effectively modify Article VII, Section 4(A) of the Louisiana Constitution. If approved, the bill would take effect on January 1, 2023, impacting corporate tax calculations for the tax years beginning on or after that date. The proposal necessitates a statewide referendum for electors to vote on its acceptance or rejection during the election scheduled for November 8, 2022.
Sentiment
The sentiment surrounding HB 275 is mixed, with significant debate among legislators and the business community. Supporters believe that the state's economy would benefit from increased tax revenue, which could potentially invigorate public programs. In contrast, opponents express concerns that the new tax policy might adversely affect corporate investment decisions, which could hinder growth and job creation within Louisiana. The main contention lies in finding a balance between adequate state funding and fostering a business-friendly environment.
Contention
The central issue of contention regarding HB 275 revolves around its implications for corporate taxation in Louisiana. Some legislators and industry representatives argue that removing the federal tax deduction may disproportionately affect smaller businesses, which often rely on such deductions. This shift may create complications for corporations already navigating Louisiana's tax landscape. The upcoming vote will serve as a critical measure of public support for the proposed changes, particularly as the state faces ongoing economic challenges.
(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 eliminates the mandatory deduction for federal income taxes paid for purposes of computing income taxes (EG SEE FISC NOTE GF RV See Note)
(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)
(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) 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)
(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)
(Constitutional Amendment) Eliminates the deduction for federal income taxes paid for purposes of computing individual income taxes (OR SEE FISC NOTE See Note)
(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)
Proposes temporary constitutional amendment allowing State constitutional convention convened to reform system of property taxation to propose statutory changes.
Proposes temporary constitutional amendment allowing State constitutional convention convened to reform system of property taxation to propose statutory changes.