HLS 23RS-290 ORIGINAL
2023 Regular Session
HOUSE BILL NO. 303
BY REPRESENTATIVE IVEY
TAX/INCOME TAX: Provides for a flat rate for purposes of calculating income tax for
individuals, estates, and trusts and modifies certain income tax deductions and
credits
1 AN ACT
2To amend and reenact R.S. 47:32(A), 293(9)(a)(iv) and (10), 294, 295(A) and (B), and 300.1
3 and to repeal R.S. 47:32(B), 79(A) and (B), 297(A), and 297.8, relative to income
4 tax; to provide for a flat income tax rate for individuals, estates, and trusts; to provide
5 for the calculation of individual income tax liability; to provide for certain
6 deductions and credits; to reduce certain deductions and credits; to provide for
7 limitations and restrictions; to provide for personal exemptions and credits for
8 dependents; to repeal the earned income tax credit; to provide for the rates and
9 brackets for estates and trusts; to provide for applicability; to provide for an effective
10 date; and to provide for related matters.
11Be it enacted by the Legislature of Louisiana:
12 Section 1. R.S. 47:32(A), 293(9)(a)(iv) and (10), 294, 295(A) and (B), and 300.1 are
13hereby amended and reenacted to read as follows:
14 §32. Rates of tax
15 A. On individuals. The tax to be assessed, levied, collected, and paid upon
16 the taxable income of an individual shall be computed at the following rates:
17 (1) One and eighty-five one hundredths percent on that portion of the first
18 twelve thousand five hundred dollars of net income which is in excess of the credits
19 against net income provided for in R.S. 47:79.
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1 (2) Three and one-half percent on the next thirty-seven thousand five
2 hundred dollars of net income.
3 (3) Four rate of four and twenty-five one hundredths percent on any amount
4 of net income in excess of fifty thousand dollars of net income.
5 * * *
6 §293. Definitions
7 The following definitions shall apply throughout this Part, unless the context
8 requires otherwise:
9 * * *
10 (9)(a) "Tax table income", for resident individuals, means adjusted gross
11 income plus interest on obligations of a state or political subdivision thereof, other
12 than Louisiana and its municipalities, title to which obligations vested with the
13 resident individual on or subsequent to January 1, 1980, and less:
14 * * *
15 (iv) The excess, if any, of the personal exemptions and deductions provided
16 for in R.S. 47:294 over the amount of the personal exemptions and deductions
17 already included in the tax tables promulgated by the secretary under authority of
18 R.S. 47:295 standard, personal, and dependent deductions provided for in R.S.
19 47:294.
20 * * *
21 (10) "Tax table income", for nonresident individuals, means the amount of
22 Louisiana income, as provided in this Part, allocated and apportioned under the
23 provisions of R.S. 47:241 through 247, plus the total amount of the personal
24 exemptions and deductions already included in the tax tables promulgated by the
25 secretary under authority of R.S. 47:295, less the proportionate amount of excess
26 federal itemized personal deductions; the temporary teacher deduction; the recreation
27 volunteer and volunteer firefighter deduction; the construction code retrofitting
28 deduction; any gratuitous grant, loan, or other benefit directly or indirectly provided
29 to a taxpayer by a hurricane recovery entity if such benefit was included in federal
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HB NO. 303
1 adjusted gross income; any gratuitous grant, loan, rebate, tax credit, advance refund,
2 or other qualified disaster relief benefit directly or indirectly provided to a taxpayer
3 by the state or federal government as a COVID-19 relief benefit as defined in R.S.
4 47:297.16 if the benefit was included in the taxpayer's federal adjusted gross income;
5 the exclusion provided for in R.S. 47:297.3 for S Bank shareholders; the deduction
6 for expenses disallowed by 26 U.S.C. 280C; salaries, wages, or other compensation
7 received for disaster or emergency-related work rendered during a declared state
8 disaster or emergency; wages of nonresident individuals who are eligible for the
9 mobile workforce exemption pursuant to R.S. 47:248; the deduction for net capital
10 gains; the pass-through entity exclusion provided in R.S. 47:297.14; the exemption
11 for military survivor benefit plan payments pursuant to R.S. 47:297.17; and standard,
12 personal, and dependent 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 §294. Personal exemptions and credit for dependents Standard, personal, and
18 dependent deductions
19 All personal exemptions and deductions for dependents allowed in
20 determining federal income tax liability, including the extra exemption for the blind
21 and aged, will be allowed in determining the tax liability in this Part. Taxpayers are
22 required to use the same filing status and claim the same exemptions on their return
23 required to be filed under this Part as they used on their federal income tax return.
24 The amounts to be taken into consideration shall be as follows:
25 A. A combined personal exemption and standard deduction in the following
26 amounts:
27 a.(1) Single Individual $ 4500.00 $12,500
28 b.(2) Married-Joint Return and a Qualified
29 Surviving Spouse $ 9000.00 $25,000
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1 c.(3) Married-Separate $ 4500.00 $12,500
2 d.(4) Head of Household $ 9000.00 $25,000
3 B. An additional deduction of one thousand dollars shall be allowed for each
4 allowable exemption in excess of those required to qualify for the exemption
5 allowable under R.S. 47:294(A).
6 B.(1) An exemption of one thousand dollars shall be allowed for a taxpayer
7 who is blind, is deaf, has sustained the loss of one or more limbs, or has an
8 intellectual disability.
9 (2) Each person claiming an exemption pursuant to the provisions of this
10 Subsection shall provide proof of a claim by providing a certificate from a qualified
11 physician or optometrist.
12 C.(1) A deduction of one thousand dollars shall be allowed for each
13 dependent as allowed in determining federal income tax liability.
14 (2)(a) In addition to the deduction authorized in Paragraph (1) of this
15 Subsection, an additional deduction of one thousand dollars shall be allowed for each
16 dependent allowed in determining federal income tax liability who is blind, is deaf,
17 has sustained the loss of one or more limbs, or has an intellectual disability.
18 (b) The taxpayer claiming the deduction authorized in this Paragraph shall
19 provide proof of a claim by providing a certificate from a qualified physician or
20 optometrist issued for each dependent for which a deduction is claimed.
21 D. As used in this Section, the following terms shall have the definitions
22 ascribed to them, unless the context indicates otherwise:
23 (1) "Blind" shall mean and refer to a person who, after examination by a
24 licensed physician skilled in diseases of the eye or by a licensed optometrist, has
25 been determined to have not more than 20/200 central visual acuity in the better eye
26 with correcting lenses, or an equally disabling loss of the visual field as evidenced
27 by a limitation to the field of vision in the better eye to such a degree that its widest
28 diameter subtends an angle of no greater than twenty degrees.
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1 (2) "Deaf" shall mean and refer to a person whose hearing is so impaired that
2 it is insufficient for use in an occupation or activity for which hearing is essential.
3 E. Allowable deductions authorized in this Section shall not exceed the
4 taxable net income of the individual pursuant to the provisions of this Chapter.
5 §295. Tax imposed on individuals; administration
6 A. There is imposed an income tax for each taxable year upon the Louisiana
7 income of every individual, whether resident or nonresident. The amount of the tax
8 shall be determined from tax tables imposing the maximum tax allowed under the
9 rates of tax and brackets set forth in accordance with R.S. 47:32 promulgated by the
10 secretary under authority of this Section in accordance with the Administrative
11 Procedure Act. However, the tax imposed by this Part shall never exceed the rates
12 of tax and brackets set forth in R.S. 47:32.
13 B. The secretary shall establish tax tables that calculate the tax owed by
14 taxpayers based upon where their taxable income falls within a range that shall not
15 exceed two hundred fifty dollars. The secretary shall provide in the tax tables that
16 the combined personal exemption, standard deduction, and other exemption
17 deductions in R.S. 47:294 shall be deducted from the lowest bracket. If the combined
18 exemptions and deductions exceed the lowest bracket, the excess shall be deducted
19 from the next lowest bracket. If the combined exemptions and deductions exceed the
20 two lowest brackets, the excess shall be deducted from the next lowest bracket.
21 * * *
22 §300.1. Tax imposed
23 There is imposed an income tax for each taxable year upon the Louisiana
24 taxable income of every estate or trust, whether resident or nonresident. The tax to
25 be assessed, levied, collected, and paid upon the Louisiana taxable income of an
26 estate or trust shall be computed at the following rates:
27 (1) One and eighty-five hundredths percent on the first ten thousand dollars
28 of Louisiana taxable income.
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1 (2) Three and one-half percent on the next forty thousand dollars of
2 Louisiana taxable income.
3 (3) Four and twenty-five one hundredths percent on Louisiana taxable
4 income in excess of fifty thousand dollars rate established in R.S. 47:32(A) for
5 individuals.
6 Section 2. R.S. 47:32(B), 79(A) and (B), 297(A), and 297.8 are hereby repealed in
7their entirety.
8 Section 3. This Act shall become effective on January 1, 2024 and shall apply to
9taxable periods beginning on or after January 1, 2024.
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 303 Original 2023 Regular Session Ivey
Abstract: Changes the rates and brackets for purposes of calculating income tax for
individuals, estates, and trusts from a graduated rate system to a single flat rate of
4.25%; modifies income tax credits and deductions; and eliminates 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)1.85% on the first $12,500 of net income.
(2)3.5% on the next $37,500 of net income.
(3)4.25% on net income in excess of $50,000.
Proposed law removes the graduated schedule of rates and provides instead a flat 4.25%
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 repeals 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 $12,500 for single, individual
and married, separate filers. Also increases to $25,000 the combined personal exemption
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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 of the Dept. of Revenue (DOR) 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 removes requirement that the range not
exceed $250.
Present law further requires the secretary to provide in the tax tables the combined personal
exemption, standard deduction, and other exemptions and deductions in present law which
are deducted from the 1.85% bracket. If the combined exemptions and deductions exceed
the 1.85% bracket, the excess is deducted from the 3.5% bracket, and then the 4.25%
bracket.
Proposed law repeals present law.
Present law defines "tax table income" for resident individuals as the adjusted gross income
plus interest on certain state or political subdivision obligations less items such as gratuitous
grants, loans, or other disaster benefits included in federal adjusted gross income, federal
income tax liability, amount deposited into medical or educational savings accounts, and
excess personal exemptions and deductions.
Proposed law retains present law but adds to the list of income not included in "tax table
income" the standard, personal, and dependent deductions provided for in proposed law.
Present law provides for an individual income tax credit based on the taxpayer's federal
earned income tax credit authorized under federal law (Section 32 of the Internal Revenue
Code). The amount of the credit is 5% of the amount of the taxpayer's federal earned income
tax credit through Dec. 31, 2030. Beginning Jan. 1, 2031, the amount of the credit is 3.5%
of the amount of the taxpayer's federal earned income tax credit.
Proposed law repeals present law.
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:
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(1)1.85% on the first $10,000 of La. taxable income.
(2)3.5% on the next $40,000 of La. taxable income.
(3)4.25% on La. taxable income in excess of $50,000.
Proposed law removes the graduated schedule of rates and provides instead a flat 4.25% rate
on taxable income of an estate or trust.
Applicable to taxable periods beginning on or after Jan. 1, 2024.
Effective January 1, 2024.
(Amends R.S. 47:32(A), 293(9)(a)(iv) and (10), 294, 295(A) and (B), and 300.1; Repeals
R.S. 47:32(B), 79(A) and (B), 297(A), and 297.8)
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