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))