Repeals the corporation franchise tax and provisions relative to determining "taxable capital" for purposes of levying the tax
Impact
The elimination of the corporation franchise tax could have significant implications for both business entities and state revenue. By abolishing this tax, the state may attract more businesses or encourage existing ones to expand their operations, fostering economic growth. Proponents of the bill argue that this reform would reduce the financial burden on companies, potentially improving job retention and creation. However, it also raises questions regarding the loss of revenue for the state, which had previously relied on this tax for funding various public services and programs.
Summary
House Bill 379 aims to repeal the corporation franchise tax in Louisiana, including all provisions related to determining 'taxable capital' for tax levying purposes. The proposed legislation outlines that the corporation franchise tax and its associated regulations, exemptions, refunds, and reporting requirements will be completely eliminated, thereby simplifying the tax landscape for businesses operating in the state. If enacted, the bill intends to take effect on January 1, 2014, and will apply to all taxable periods commencing on or after this date.
Sentiment
Overall, the sentiment around HB 379 appears to be supportive among business groups and advocates for tax reform. Supporters claim that repealing the corporation franchise tax will level the playing field for businesses, particularly small and medium-sized enterprises. However, there are concerns expressed by others who believe that the loss of tax revenue could adversely impact state funding and public services. This creates a divide between fiscal responsibility and the desire to promote economic activity through tax cuts.
Contention
Notable points of contention center around the implications of abolishing the corporation franchise tax. Critics may argue that the tax provides essential funding for state services and that its repeal could lead to budget shortfalls. Additionally, there may be debates over whether the projected economic benefits of attracting more businesses outweigh the potential revenue losses. Legislators and stakeholders may have differing views on fiscal prudence and the role of taxation in fostering a healthy business environment.
Repeals the corporation franchise tax and provisions relative to determining "taxable capital" for purposes of levying the tax (OR -$79,000,000 GF RV See Note)
Repeals the corporation franchise tax and limits eligibility of certain credits to be claimed against corporation franchise tax (Item #3) (EN -$574,000,000 RV See Note)
Repeals the corporation franchise tax and removes eligibility of certain tax credits to be claimed against corporation franchise tax (OR -$324,000,000 GF RV See Note)
Suspends the corporation franchise tax levied on certain taxable capital and suspends the initial corporation franchise tax levied on certain entities (Item #16) (EG -$10,200,000 GF RV See Note)
Reduces the rate for corporate income tax and repeals corporate franchise taxes and federal deductions allowed on net state corporate income tax (OR -$79,000,000 GF RV See Note)