Terminates certain tax exemptions and deductions in 2021. (8/1/17) (EG INCREASE GF RV See Note)
Impact
The implications of SB 206 are significant for local businesses and various organizations that currently benefit from tax exemptions. Specifically, the bill targets marine and aviation gasoline, as well as specific deductions and exclusions related to corporate incomes and deductions from gross income. If enacted, this would mean that numerous entities, including cooperative associations, could face increased tax liabilities. The change raises concerns among stakeholders about the potential side effects on operational costs and economic viability, particularly for smaller businesses or cooperatives that rely heavily on such tax benefits for sustainability.
Summary
Senate Bill 206, introduced by Senator Morrell, aims to terminate several tax exemptions and deductions in Louisiana effective January 1, 2021. The bill seeks to amend existing laws related to various tax policies, including exemptions on state taxes for certain corporations, labor organizations, and various commodities. By repealing these exemptions, the bill is intended to enhance the state's revenue collection capabilities and create a more equitable taxation framework by eliminating favorable tax treatments for specific entities. This legislative action is part of a broader effort to modify the tax landscape in Louisiana to address revenue shortfalls and explore more consistent revenue generation methods.
Sentiment
The sentiment around SB 206 appears to be mixed. Proponents argue that terminating excessive tax exemptions is a necessary move to improve state revenues and ensure a fairer distribution of tax burdens among all businesses. Conversely, opponents express concerns that the elimination of these tax benefits could disproportionately affect smaller entities and charitable organizations that depend on exemptions to operate effectively. This polarization among lawmakers and community members highlights the tension between the need for increased revenue and the implications for economic equity.
Contention
Notable points of contention surrounding SB 206 include the debate over the balance between increased state revenue and the economic impact on those affected by the loss of tax exemptions. Critics have raised concerns that the bill could push businesses toward higher operational costs, leading to potential job losses or reductions in services offered. The discussion also touches on broader themes of tax fairness and whether the state should prioritize revenue generation over nurturing a business-friendly environment that encourages growth and development for all entities.
Provides for a flat rate for purposes of calculating corporate income tax and terminates certain corporate income tax exemptions, deductions, and credits (Item #4) (EN SEE FISC NOTE RV See Note)