Louisiana House Bill HB312

Louisiana 2017 Regular Session

• Introduced: 3/30/17
• Refer: 3/30/17
• Refer: 4/10/17
• Report Pass: 5/8/17

Caption

Repeals the three-year sunset of certain eligibility provisions for the tax credit for taxes paid to other states and authorizes the credit for certain individual partners or members of entities (EG SEE FISC NOTE GF RV See Note)

Impact

The repeal of the sunset provision marks a significant change in the state's tax policy by making the tax credit permanent. This change could potentially create a more favorable tax environment for residents of Louisiana who earn income through partnerships and other entities that are subject to taxation in other states. The extension of this credit to individual partners or members encourages multi-state business operations and protects these individuals from being taxed multiple times on the same income.

Summary

House Bill 312 aims to amend Louisiana's tax code by repealing the three-year sunset provision on specific eligibility requirements for the individual income tax credit concerning taxes paid to other states. It allows individual partners or members of entities who pay entity-level taxes in other states to claim a credit equal to fifty percent of their proportionate share of those taxes paid. This means that individual partners will not only benefit from the tax credits without expiration but will also receive credits for taxes paid on an income-basis and not a capital-component basis.

Sentiment

The general sentiment around HB312 appears supportive among business groups and stakeholders who advocate for reduced tax burdens on individuals engaged in interstate commerce. By providing tax credits that mitigate the effects of double taxation, the bill is seen as beneficial for entrepreneurs and small business owners. However, there may be concerns from those wary of potential revenue losses for the state from tax credits or those who believe that tax policies should favor broader, more localized tax benefits.

Contention

Notable points of contention may arise over the implications of extending tax credits to specific individuals and the potential cost to state revenue over time. While proponents will argue that such tax benefits are essential for maintaining competitive conditions for Louisiana businesses and attracting out-of-state investments, opponents may raise concerns regarding the equity of tax relief that favors certain individuals or businesses over others, thus opening discussions concerning the overall tax structure in Louisiana.