GREEN SHEET REDIGEST
HB 618 2023 Regular Session Willard
TAX CREDITS: Provides with respect to the credit and the deduction for taxes paid
to other states.
DIGEST
Present law authorizes an income tax credit for resident individuals for net income taxes
imposed by and paid to another state on income taxable in La. if certain conditions are met.
Present law limits the credit to the amount of La. income tax that would have been imposed
if the income earned in the other state had been earned in La. and prohibits the credit for tax
paid on income that is not subject to tax in La. Present law provides that the amount of the
credit shall not exceed the ratio of multiplying the taxpayer's La. income tax liability before
consideration of the credit authorized in present law by a fraction, the numerator of which
is the taxpayer's La. tax table income attributable to other states to which net income taxes
were paid by a resident individual, and the denominator of which is total La. tax table
income.
Present law prohibits the credit for income taxes paid to a state that allows a nonresident a
credit against the income taxes imposed by that state for taxes paid or payable to the state of
residence.
Proposed law retains present law. Provides that certain provisions of present law providing
for prospective repeal do not become effective.
Present law provides that the credit shall be allowed only if the other state provides a similar
credit for La. income taxes paid on income derived from property located in, or from services
rendered in, or from business transacted in La.
Proposed law repeals present law.
Present law provides that for taxes paid on or after Jan. 1, 2018, an individual partner,
member, or shareholder that pays another state's entity-level tax that is based solely upon net
income included in the entity's federal taxable income without any capital component shall
be allowed a deduction equal to their proportionate share of the entity-level tax paid. The
deduction shall only be allowed to the extent that the proportionate share of the related
income on the tax paid to the other state is included in the calculation of La. taxable income
that is reported on the La. return of the individual partner or member.
Proposed law retains present law but specifies that the deduction authorized in present law
is in lieu of the credit authorized in present law.
Proposed law limits the credit for taxes paid to other states to taxes paid and reported to the
other state on taxable income which is computed in accordance with income tax laws and
regulations of the other state.
Proposed law applies to taxable years beginning on or after Jan. 1, 2023.
Effective upon signature of governor or lapse of time for gubernatorial action.
(Amends R.S. 47:33 and ยง4 of Act No. 109 of 2015 R.S. as amended by Act No. 6 of 2018
2 E.S.)
Summary of Amendments Adopted by House
The Committee Amendments Proposed by House Committee on Ways and Means to the
original bill:
Page 1 of 2
Prepared by Danielle Clapinski. 1. Make technical changes.
The House Floor Amendments to the engrossed bill:
1. Remove the limitation that the credit for taxes paid to other states is applicable
to taxes paid and reported to the other state on taxable income which is computed
in accordance with income tax laws and regulations of the other state.
2. Add applicability provisions for proposed law to taxable years beginning on or
after Jan. 1, 2023.
Summary of Amendments Adopted by Senate
Committee Amendments Proposed by Senate Committee on Revenue and Fiscal Affairs
to the reengrossed bill
1. Makes technical changes.
Page 2 of 2
Prepared by Danielle Clapinski.