Louisiana House Bill HB630

Louisiana 2017 Regular Session

• Introduced: 4/18/17
• Refer: 4/19/17

Caption

Eliminates the deductibility of federal income taxes paid for purposes of calculating state individual income tax

Impact

If enacted, HB630 would impact the personal financial situations of many Louisiana residents. Without the ability to deduct federal taxes from their state taxable income, individuals could potentially see an increase in their state tax liability. This change is posited to simplify the tax calculation process; however, it may disproportionately affect lower and middle-income earners who utilize the federal deduction more than higher income individuals.

Summary

House Bill 630 seeks to amend Louisiana's income tax laws by eliminating the deductibility of federal income taxes paid when calculating state individual income taxes. The bill outlines that individuals will no longer be able to reduce their taxable income by the amount of federal income tax paid, which represents a significant shift in tax policy. The proposal stipulates that these changes would apply to all taxable periods beginning January 1, 2018, pending a related constitutional amendment being adopted in a statewide election.

Sentiment

The sentiment surrounding HB630 is mixed, reflecting a divide among lawmakers and constituents. Proponents argue that eliminating the deduction could create a more equitable tax system and streamline tax policies statewide. Conversely, opponents are concerned about the increased tax burden on individuals and the potential economic strain this may place on families already facing financial difficulties.

Contention

A notable point of contention regarding HB630 is its relation to proposed constitutional amendments affecting state tax policy. Some legislators worry that enacting this bill without broader tax reform and adequate public consultation may lead to unintended consequences for the state's fiscal health. Additionally, discussions during legislative sessions have highlighted concerns regarding fairness and the implication of increased taxes for certain demographics within Louisianan society.