HLS 21RS-142 ORIGINAL
2021 Regular Session
HOUSE BILL NO. 279
BY REPRESENTATIVES DEVILLIER, BEAULLIEU, BISHOP, AND IVEY
TAX/CORP FRANCHISE: Phases-out the corporation franchise tax over a certain period
of time
1 AN ACT
2To amend and reenact R.S. 47:601(A), (B), and (C)(2) and to enact R.S. 47:611(C), relative
3 to the corporate franchise tax; to provide for the rate of the corporate franchise tax;
4 to provide for a reduction and eventual elimination of the corporate franchise tax; to
5 prohibit the levy of an initial tax under certain circumstances; to provide for
6 applicability; to provide for an effective date; and to provide for related matters.
7Be it enacted by the Legislature of Louisiana:
8 Section 1. R.S. 47:601(A), (B), and (C)(2) are hereby amended and reenacted and
9R.S. 47:611(C) is hereby enacted to read as follows:
10 §601. Imposition of tax
11 A.(1) Except as provided for in Paragraph (2) of this Subsection, every
12 Every domestic corporation and every foreign corporation, exercising its charter, or
13 qualified to do business or actually doing business in this state, or owning or using
14 any part or all of its capital, plant, or any other property in this state, subject to
15 compliance with all other provisions of law, except as otherwise provided for in this
16 Chapter shall pay an annual tax at the rate of one dollar and fifty cents for each one
17 thousand dollars, or major fraction thereof on the first three hundred thousand dollars
18 of taxable capital and at the rate of three dollars for each one thousand dollars, or
19 major fraction thereof, which exceeds three hundred thousand dollars of taxable
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HB NO. 279
1 capital. Taxable capital shall be determined as hereinafter provided. The tax levied
2 herein is due and payable on any one or all of the following alternative incidents:
3 (1)(a) The qualification to carry on or do business in this state or the actual
4 doing of business within this state in a corporate form. The term "doing business"
5 as used herein shall mean and include each and every act, power, right, privilege, or
6 immunity exercised or enjoyed in this state, as an incident to or by virtue of the
7 powers and privileges acquired by the nature of such organizations, as well as, the
8 buying, selling, or procuring of services or property.
9 (2)(b) The exercising of a corporation's charter or the continuance of its
10 charter within this state.
11 (3)(c) The owning or using any part or all of its capital, plant, or other
12 property in this state whether owned directly or indirectly by or through a
13 partnership, joint venture, or any other business organization of which the domestic
14 or foreign corporation is a related party as defined in R.S. 47:605.1.
15 (2) The tax levied pursuant to the provisions of this Chapter shall be limited
16 to the following percentages of the amount otherwise levied pursuant to the
17 provisions of this Chapter:
18 (a) For taxable years beginning on or after January 1, 2023, and before
19 January 1, 2024, eighty percent.
20 (b) For taxable years beginning on or after January 1, 2024, and before
21 January 1, 2025, sixty percent.
22 (c) For taxable years beginning on or after January 1, 2025, and before
23 January 1, 2026, forty percent.
24 (d) For taxable years beginning on or after January 1, 2026, and before
25 January 1, 2027, twenty percent.
26 (e) For taxable years beginning on or after January 1, 2027, no corporation
27 franchise tax shall be assessed, levied, or collected by the state nor paid by domestic
28 or foreign corporations on taxable capital.
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HB NO. 279
1 B. It is the purpose of this Section to require the payment of this tax to the
2 state of Louisiana by domestic corporations for the right granted by the laws of this
3 state to exist as such an organization, and by both domestic and foreign corporations
4 for the enjoyment, under the protection of the laws of this state, of the powers, rights,
5 privileges, and immunities derived by reason of the corporate form of existence and
6 operation. The tax hereby imposed pursuant to the provisions of this Chapter shall
7 be in addition to all other taxes levied by any other statute.
8 C.
9 * * *
10 (2) The term "foreign corporation" shall mean and include all such business
11 organizations as hereinbefore described in this Paragraph (1) of this Subsection
12 which are organized under the laws of any other state, territory or district, or foreign
13 country.
14 * * *
15 §611. Newly taxable corporation
16 * * *
17 C. For taxable years beginning on or after January 1, 2027, no initial tax
18 shall be assessed, levied, or collected by the state nor paid by domestic or foreign
19 corporations.
20 Section 2. The provisions of this Act shall be applicable to corporate franchise tax
21periods beginning on or after January 1, 2023.
22 Section 3. This Act shall take effect and become operative if and when the proposed
23amendment of Article VII of the Constitution of Louisiana contained in the Act which
24originated as House Bill No. ___ of this 2021 Regular Session of the Legislature is adopted
25at a statewide election and becomes effective.
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HB NO. 279
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 279 Original 2021 Regular Session DeVillier
Abstract: Phases-out the corporate franchise tax over five years beginning Jan. 1, 2023.
Present law (R.S. 47:601 et seq.) establishes the corporation franchise tax which is levied
on every domestic and foreign corporation exercising its charter, qualified to do business,
or actually doing business in La. The corporation franchise tax is also levied on any domestic
or foreign corporation owning or using any part of its capital, plant, or other property in La.
Present law provides that the tax shall be levied at the following rates:
(1)$1.50 per $1,000 of taxable capital, up to $300,000.
(2)$3 per $1,000 of taxable capital above $300,000.
Present law levies the corporation franchise tax on a corporation when any of the following
occurs:
(1)An organization does business within this state in a corporate form.
(2)A corporation exercises its charter or the continuance of its charter within La.
(3)An entity owns or uses part or all of its capital, plant, or other property in La. in a
corporate capacity.
Present law provides for the determination of taxable capital for purposes of levying the
corporation franchise tax as well as the tax treatment of capital stock, surplus and undivided
profits, and the allocation of taxable capital. Present law further provides for the
administration of the tax as well as the collection and payment of the tax.
Proposed law provides for the phase-out of the corporate franchise tax for taxable years
beginning on or after Jan. 1, 2023, by reducing the amount of the tax by 20% each year until
no tax is levied on the taxable capital of corporations for tax years beginning on or after Jan.
1, 2027.
Present law requires every corporation or other entity subject to the franchise tax to pay only
an initial tax of $110 in the first accounting period in which it becomes subject to the tax.
After the first closing of the corporate books, the tax is payable as provided in present law.
Proposed law clarifies that no initial tax shall be levied or collected by the state nor paid by
domestic or foreign corporations for taxable years beginning on or after Jan. 1, 2027.
Proposed law applies to all corporate franchise tax periods beginning on or after Jan. 1,
2023.
Effective 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 2021 R.S. of the
Legislature is adopted at a statewide election and becomes effective.
(Amends R.S. 47:601(A), (B), and (C)(2); Adds R.S. 47:611(C))
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