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 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:
(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)