Provides relative to the apportionment formula for computing corporate income tax (Item #5) (OR SEE FISC NOTE GF RV)
Impact
If enacted, the changes stipulated by HB 58 would directly affect the way corporate income tax is determined for various sectors. By adjusting the emphasis on net sales in the apportionment formula, the bill supports a taxation structure that may better reflect the economic activity of companies within Louisiana. Proponents of the bill argue that a more representative apportionment will support fairness in taxation and bolster state revenues that can be directed toward public services and infrastructure improvements.
Summary
House Bill 58 proposes a significant change to the existing formula for calculating corporate income tax apportionment in Louisiana, specifically for businesses involved in manufacturing, transportation, and service sectors. The bill aims to double-weight the ratio of net sales in the apportionment calculation. This amendment seeks to ensure that the income attributed to Louisiana from these businesses is assessed more accurately, thereby potentially increasing tax revenues from these sectors. The new calculation method will be applicable to taxable periods beginning on January 1, 2016, onwards.
Sentiment
The overall sentiment surrounding HB 58 appears to be mixed. Supporters, including legislators focused on economic development, express optimism that the new formula will stimulate business growth and ensure fair distribution of tax obligations among companies. Conversely, some critics argue that changing the apportionment ratio may unfairly burden certain industries, particularly smaller businesses that could struggle with the increased tax liability resulting from the new calculations.
Contention
One notable point of contention revolves around the potential economic impact on smaller businesses and service sectors. Critics of the bill voice concerns that by double-weighting the sales ratio, the legislation might inadvertently create obstacles for local enterprises that rely heavily on sales but lack other substantial assets in the state. This could lead to disparities in the tax burden across different business types, prompting discussions about the equity of the tax system and the bill's long-term implications for Louisiana's economic landscape.
Provides relative to the apportionment ratio for purposes of computing corporate income tax and provides for the sourcing of sales (Item #44) (EN INCREASE GF RV See Note)
Provides relative to calculation of the Louisiana apportionment percent and taxable capital for manufacturers of certain aircraft (EN SEE FISC NOTE GF RV See Note)
Levies a flat tax on corporations and eliminates the deduction for federal income taxes paid for purposes of computing corporate income taxes (OR -$58,000,000 GF RV See Note)
Repeals the state income tax deduction for federal income taxes paid for purposes of calculating individual and corporate income taxes (Item #17) (RE1 SEE FISC NOTE GF RV See Note)
Establishes the Corporate Tax Apportionment Program for the granting of contracts for certain businesses to utilize the single sales factor to compute their taxable for income tax purposes and their taxable capital for franchise tax purposes. (7/1/12) (EG DECREASE GF RV See Note)
Provides relative to the apportionment ratio for purposes of computing corporate income tax and provides for the sourcing of sales (Item #44) (EN INCREASE GF RV See Note)
Provides relative to calculation of the Louisiana apportionment percent and taxable capital for manufacturers of certain aircraft (EN SEE FISC NOTE GF RV See Note)
Extends the single sales factor for computation of corporate income and franchise taxes for manufacturing or merchandising to other qualified businesses through establishment of the Corporate Tax Apportionment Program (EN DECREASE GF RV See Note)
Establishes the Corporate Tax Apportionment Program for the granting of contracts for certain businesses to utilize the single sales factor to compute their taxable for income tax purposes and their taxable capital for franchise tax purposes. (7/1/12) (EG DECREASE GF RV See Note)