HLS 21RS-215 ENGROSSED
2021 Regular Session
HOUSE BILL NO. 475
BY REPRESENTATIVE NELSON
TAX/INCOME TAX: Phases-out the taxes levied on the income of individuals and estates
and trusts and reduces the amount of exemptions, deductions, and credits that may
be claimed to reduce income tax liability
1 AN ACT
2To amend and reenact R.S. 47:32(A), 241, 293(10), 300.1, 300.6(A), and 300.7(A), to enact
3 R.S. 47:32.1 and 300.12, and to repeal R.S. 47:293(4) and (9)(a)(ii), 296.1(B)(3)(c),
4 and 298, relative to individual income taxes; to provide for the rate of the individual
5 income tax; to provide for a reduction and eventual elimination of the individual
6 income tax; to provide for the rate of the income tax levied on estates and trusts; to
7 provide for a reduction and eventual elimination of the income taxes levied on
8 estates and trusts; to provide for the claiming of income tax exemptions, deductions,
9 and credits for individuals and estates and trusts; to repeal the deductibility of federal
10 income taxes paid for purposes of calculating income tax liability for individuals and
11 estates and trusts; to provide for applicability; to provide for an effective date; and
12 to provide for related matters.
13Be it enacted by the Legislature of Louisiana:
14 Section 1. R.S. 47:32(A), 241, 293(10), 300.1, 300.6(A), and 300.7(A) are hereby
15amended and reenacted and R.S. 47:32.1 and 300.12 are hereby enacted to read as follows:
16 §32. Rates of tax
17 A.(1) On individuals. Until January 1, 2023, the The tax to be assessed,
18 levied, collected and paid upon the taxable income of an individual shall be
19 computed at the following rates:
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1 (1)(a) Two percent on that portion of the first twelve thousand five hundred
2 dollars of net income which is in excess of the credits against net income provided
3 for in R.S. 47:79;.
4 (2)(b) Four percent on the next thirty-seven thousand five hundred dollars
5 of net income;.
6 (3)(c) Six percent on any amount of net income in excess of fifty thousand
7 dollars of net income.
8 (2) For tax years beginning on or after January 1, 2023, but before January
9 1, 2024, the tax to be assessed, levied, collected, and paid upon the taxable income
10 of an individual shall be computed at the rate of:
11 (a) One and one-half percent on that portion of the first twelve thousand five
12 hundred dollars of net income which is in excess of the credits against net income
13 provided for in R.S. 47:79.
14 (b) Three percent on the next thirty-seven thousand five hundred dollars of
15 net income.
16 (c) Four and one-half percent on any amount of net income in excess of fifty
17 thousand dollars of net income.
18 (3) For tax years beginning on or after January 1, 2024, but before January
19 1, 2025, the tax to be assessed, levied, collected, and paid upon the taxable income
20 of an individual shall be computed at the rate of:
21 (a) One percent on that portion of the first twelve thousand five hundred
22 dollars of net income which is in excess of the credits against net income provided
23 for in R.S. 47:79.
24 (b) Two percent on the next thirty-seven thousand five hundred dollars of net
25 income.
26 (c) Three percent on any amount of net income in excess of fifty thousand
27 dollars of net income.
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1 (4) For tax years beginning on or after January 1, 2025, but before January
2 1, 2026, the tax to be assessed, levied, collected, and paid upon the taxable income
3 of an individual shall be computed at the rate of:
4 (a) One-half of one percent on that portion of the first twelve thousand five
5 hundred dollars of net income which is in excess of the credits against net income
6 provided for in R.S. 47:79.
7 (b) One percent on the next thirty-seven thousand five hundred dollars of net
8 income.
9 (c) One and one-half percent on any amount of net income in excess of fifty
10 thousand dollars of net income.
11 (5) For tax years beginning on or after January 1, 2026, no tax shall be
12 assessed, levied, collected, and paid upon the taxable income of an individual.
13 §32.1. Utilization of individual income tax exemptions, deductions, and credits;
14 limitations
15 The value of each exemption, deduction, and credit included in Chapter 26
16 of Title 25 of the Louisiana Revised Statutes of 1950; this Chapter, Chapters 3 and
17 5 of Subtitle V, and Chapters 1, 2, and 3 of Subtitle VII of this Title; and Chapters
18 21, 23, 26, 39, and 39-C of Title 51 of the Louisiana Revised Statutes of 1950, which
19 limits the individual income tax liability of a taxpayer shall be reduced as follows:
20 (1) For taxable years beginning on or after January 1, 2023, but before
21 January 1, 2024, the value of each exemption, deduction, and credit claimed on a tax
22 return to limit individual income tax liability shall be reduced by twenty-five percent.
23 (2) For taxable years beginning on or after January 1, 2024, but before
24 January 1, 2025, the value of each exemption, deduction, and credit claimed on a tax
25 return to limit individual income tax liability shall be reduced by fifty percent.
26 (3) For taxable years beginning on or after January 1, 2025, but before
27 January 1, 2026, the value of each exemption, deduction, and credit claimed on a tax
28 return to limit individual income tax liability shall be reduced by seventy-five
29 percent.
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1 (4) For taxable years beginning on or after January 1, 2026, the value of each
2 exemption, deduction, and credit claimed on a tax return to limit individual income
3 tax liability shall be reduced by one hundred percent.
4 * * *
5 §241. Net income subject to tax
6 The net income of a nonresident individual or a corporation subject to the tax
7 imposed by this Chapter shall be the sum of the net allocable income earned within
8 or derived from sources within this state, as defined in R.S. 47:243, and the net
9 apportionable income derived from sources in this state, as defined in R.S. 47:244,
10 less the amount of federal income taxes attributable to the net allocable income and
11 net apportionable income derived from sources in this state. The amount of federal
12 income taxes to be so deducted shall be that portion of the total federal income tax
13 which is levied with respect to the particular income derived from sources in this
14 state to be computed in accordance with rules and regulations of the collector of
15 revenue. Proper adjustment shall be made for the actual tax rates applying to
16 different classes of income and for all differences in the computation of net income
17 for purposes of federal income taxation as compared to the computation of net
18 income under this Chapter. Where the allocation of the tax is to be based on a ratio
19 of the amount of net income of a particular class, both the numerator and the
20 denominator of the fraction used in determining the ratio shall be computed on the
21 basis that such net income is determined for federal income tax purposes.
22 * * *
23 §293. Definitions
24 The following definitions shall apply throughout this Part, unless the context
25 requires otherwise:
26 * * *
27 (10) "Tax table income", for nonresident individuals, means the amount of
28 Louisiana income, as provided in this Part, allocated and apportioned under the
29 provisions of R.S. 47:241 through 247, plus the total amount of the personal
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1 exemptions and deductions already included in the tax tables promulgated by the
2 secretary under authority of R.S. 47:295, less the proportionate amount of the federal
3 income tax liability, excess federal itemized personal deductions, the temporary
4 teacher deduction, the recreation volunteer and volunteer firefighter deduction, the
5 construction code retrofitting deduction, any gratuitous grant, loan, or other benefit
6 directly or indirectly provided to a taxpayer by a hurricane recovery entity if such
7 benefit was included in federal adjusted gross income, the exclusion provided for in
8 R.S. 47:297.3 for S Bank shareholders, the deduction for expenses disallowed by 26
9 U.S.C. 280C, salaries, wages or other compensation received for disaster or
10 emergency-related work rendered during a declared state disaster or emergency, the
11 deduction for net capital gains, the pass-through entity exclusion provided in R.S.
12 47:297.14, and personal exemptions and deductions provided for in R.S. 47:294. The
13 proportionate amount is to be determined by the ratio of Louisiana income to federal
14 adjusted gross income. When federal adjusted gross income is less than Louisiana
15 income, the ratio shall be one hundred percent.
16 * * *
17 §300.1. Tax imposed
18 A. There is imposed an income tax for each taxable year upon the Louisiana
19 taxable income of every estate or trust, whether resident or nonresident. Until
20 January 1, 2023, the The tax to be assessed, levied, collected, and paid upon the
21 Louisiana taxable income of an estate or trust shall be computed at the following
22 rates:
23 (1) Two percent on the first ten thousand dollars of Louisiana taxable
24 income.
25 (2) Four percent on the next forty thousand dollars of Louisiana taxable
26 income.
27 (3) Six percent on Louisiana taxable income in excess of fifty thousand
28 dollars.
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1 B. For tax years beginning on or after January 1, 2023, but before January
2 1, 2024, the tax to be assessed, levied, collected, and paid upon the Louisiana taxable
3 income of an estate or trust shall be computed at the rate of:
4 (1) One and one-half percent on the first ten thousand dollars of Louisiana
5 taxable income.
6 (2) Three percent on the next forty thousand dollars of Louisiana taxable
7 income.
8 (3) Four and one-half percent on Louisiana taxable income in excess of fifty
9 thousand dollars.
10 C. For tax years beginning on or after January 1, 2024, but before January
11 1, 2025, the tax to be assessed, levied, collected, and paid upon the Louisiana taxable
12 income of an estate or trust shall be computed at the rate of:
13 (1) One percent on the first ten thousand dollars of Louisiana taxable
14 income.
15 (2) Two percent on the next forty thousand dollars of Louisiana taxable
16 income.
17 (3) Three percent on any Louisiana taxable income in excess of fifty
18 thousand dollars.
19 D. For tax years beginning on or after January 1, 2025, but before January
20 1, 2026, the tax to be assessed, levied, collected, and paid upon the Louisiana taxable
21 income of an estate or trust shall be computed at the rate of:
22 (1) One-half of one percent on the first ten thousand dollars of Louisiana
23 taxable income.
24 (2) One percent on the next forty thousand dollars of Louisiana taxable
25 income.
26 (3) One and one-half percent on Louisiana taxable income in excess of fifty
27 thousand dollars.
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1 E. For tax years beginning on or after January 1, 2026, no tax shall be
2 assessed, levied, collected, and paid upon the Louisiana taxable income of an estate
3 or trust.
4 * * *
5 §300.6. Louisiana taxable income of resident estate or trust
6 A. Definition. "Louisiana taxable income" of a resident estate or trust means
7 the taxable income of the estate or trust determined in accordance with federal law
8 for the same taxable year, as specifically modified by the provisions contained in
9 Subsection B of this Section, less a federal income tax deduction to be computed
10 following the provisions of R.S. 47:287.83 and 287.85.
11 * * *
12 §300.7. Louisiana taxable income of nonresident estate or trust
13 A. Definition. "Louisiana taxable income" of a nonresident estate or trust
14 means such portion of the taxable income of the nonresident estate or trust
15 determined in accordance with federal law for the same taxable year, as specifically
16 modified by the provisions contained in Subsection C of this Section, that was earned
17 within or derived from sources within this state, less a federal income tax deduction
18 to be computed following the provisions of R.S. 47:287.83 and 287.85.
19 * * *
20 §300.12. Utilization of income tax exemptions, deductions and credits applicable to
21 estates and trusts; limitations
22 The value of each exemption, deduction, and credit included in Chapter 26
23 of Title 25 of the Louisiana Revised Statutes of 1950; this Chapter, Chapters 3 and
24 5 of Subtitle V, and Chapters 1, 2, and 3 of Subtitle VII of this Title; and Chapters
25 21, 23, 26, 39, and 39-C of Title 51 of the Louisiana Revised Statutes of 1950, which
26 limits the income tax liability of an estate or trust shall be reduced as follows:
27 (1) For taxable years beginning on or after January 1, 2023, but before
28 January 1, 2024, the value of each exemption, deduction, and credit claimed on a tax
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1 return to limit the income tax liability of an estate or trust shall be reduced by
2 twenty-five percent.
3 (2) For taxable years beginning on or after January 1, 2024, but before
4 January 1, 2025, the value of each exemption, deduction, and credit claimed on a tax
5 return to limit the income tax liability of an estate or trust shall be reduced by fifty
6 percent.
7 (3) For taxable years beginning on or after January 1, 2025, but before
8 January 1, 2026, the value of each exemption, deduction, and credit claimed on a tax
9 return to limit the income tax liability of an estate or trust shall be reduced by
10 seventy-five percent.
11 (4) For taxable years beginning on or after January 1, 2026, the value of each
12 exemption, deduction, and credit claimed on a tax return to limit the income tax
13 liability of an estate or trust shall be reduced by one hundred percent.
14 Section 2. R.S. 47:293(4) and (9)(a)(ii), 296.1(B)(3)(c), and 298 are hereby repealed
15in their entirety.
16 Section 3. The provisions of this Act shall be applicable to taxable periods beginning
17on or after January 1, 2023.
18 Section 4. This Act shall take effect and become operative on January 1, 2023, if
19the proposed amendment of Article VII of the Constitution of Louisiana contained in the Act
20which originated as House Bill No. 526 of this 2021 Regular Session of the Legislature is
21adopted at a statewide election and becomes effective.
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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 475 Engrossed 2021 Regular Session Nelson
Abstract: Phases-out individual income taxes and taxes levied on the income of estates and
trusts over four years, repeals the deductibility of federal income taxes paid for
purposes of calculating income tax liability, and reduces the amount of exemptions,
deductions, and credits that may be claimed on tax returns to reduce income tax
liability.
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 changes present law for tax years beginning on or after Jan. 1, 2023, but before
Jan. 1, 2024, by reducing the tax rates for individual income tax as follows:
(1)From 2% to 1.5% on the first $12,500 of net income.
(2)From 4% to 3% on the next $37,500 of net income.
(3)From 6% to 4.5% on net income in excess of $50,000.
Proposed law provides for the further reduction of individual income tax rates for tax years
beginning on or after Jan. 1, 2024, but before Jan. 1, 2025, as follows:
(1)From 1.5% to 1% on the first $12,500 of net income.
(2)From 3% to 2% on the next $37,500 of net income.
(3)From 4.5% to 3% on net income in excess of $50,000.
Proposed law provides for the further reduction of individual income tax rates for tax years
beginning on or after Jan. 1, 2025, but before Jan. 1, 2026, as follows:
(1)From 1% to .5% on the first $12,500 of net income.
(2)From 2% to 1% on the next $37,500 of net income.
(3)From 3% to 1.5% on net income in excess of $50,000.
Proposed law prohibits tax from being assessed, levied, collected, and paid upon the taxable
income of an individual for tax years beginning on or after Jan. 1, 2026.
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.
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(2)4% on the next $40,000 of La. taxable income.
(3)6% on La. taxable income in excess of $50,000.
Proposed law changes present law for tax years beginning on or after Jan. 1, 2023, but before
Jan. 1, 2024, by reducing the tax rates for taxes levied on estates and trusts as follows:
(1)From 2% to 1.5% on the first $10,000 of La. taxable income.
(2)From 4% to 3% on the next $40,000 of La. taxable income.
(3)From 6% to 4.5% on La. taxable income in excess of $50,000.
Proposed law provides for the further reduction of the tax levied on the taxable income of
estates and trusts for tax years beginning on or after Jan. 1, 2024, but before Jan. 1, 2025, as
follows:
(1)From 1.5% to 1% on the first $10,000 of La. taxable income.
(2)From 3% to 2% on the next $40,000 of La. taxable income.
(3)From 4.5% to 3% on La. taxable income in excess of $50,000.
Proposed law provides for the further reduction of the tax levied on the taxable income of
estates and trusts for tax years beginning on or after Jan. 1, 2025, but before Jan. 1, 2026, as
follows:
(1)From 1% to .5% on the first $10,000 of La. taxable income.
(2)From 2% to 1% on the next $40,000 of La. taxable income.
(3)From 3% to 1.5% on La. taxable income in excess of $50,000.
Proposed law prohibits tax from being assessed, levied, collected, and paid on the taxable
income of an estate or trust beginning on or after Jan. 1, 2026.
Present law includes various tax incentives in the form of credits, deductions, and
exemptions from individual income tax and income taxes levied on estates and trusts which
reduce a taxpayer's overall tax liability.
Proposed law retains present law but reduces the value of the tax credits, deductions, and
exemptions that may be claimed on a tax return to reduce a taxpayer's tax liability as
follows:
(1)For taxable years beginning on or after Jan. 1, 2023, but before Jan. 1, 2024, by 25%.
(2)For taxable years beginning on or after Jan. 1, 2024, but before Jan. 1, 2025, by 50%.
(3)For taxable years beginning on or after Jan. 1, 2025, but before Jan. 1, 2026, by 75%.
(4)For taxable years beginning on or after Jan. 1, 2026, by 100%.
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 income taxes and the taxes of
estates and trusts.
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HB NO. 475
Proposed law applies to all tax 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. 526 of this 2021 R.S. of the
Legislature is adopted at a statewide election and becomes effective.
(Amends R.S. 47:32(A), 241, 293(10), 300.1, 300.6(A), and 300.7(A); Adds R.S. 47:32.1
and 300.12: Repeals R.S. 47:293(4) and (9)(a)(ii), 296.1(B)(3)(c), and 298)
Summary of Amendments Adopted by House
The Committee Amendments Proposed by House Committee on Ways and Means to the
original bill:
1. Specify the House Bill No. of the proposed constitutional amendment to which
the effectiveness of proposed law is tied.
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