Louisiana House Bill HB89

Louisiana 2021 Regular Session

• Introduced: 3/9/21
• Refer: 3/9/21
• Refer: 4/12/21

Caption

Establishes an individual income tax deduction for certain insurance costs (OR DECREASE GF RV See Note)

Impact

By enacting HB89, the state of Louisiana will amend its income tax code to include this new deduction, which is expected to have a positive financial impact for qualified taxpayers from January 1, 2022, onwards. The deduction will not exceed the taxpayer's total income but will provide relief for insurance-related expenses, thereby incentivizing responsible vehicle ownership and adherence to mandatory insurance laws. It positions the state alongside other jurisdictions that have sought similar measures to ease the financial stress of insurance costs on residents.

Summary

House Bill 89, introduced by Representative Bagley, seeks to establish an individual income tax deduction for certain automobile insurance costs specifically related to motor vehicle liability policies. The bill allows taxpayers to deduct the premiums they pay for liability insurance from their taxable income, up to a maximum of $1,500. This deduction aims to alleviate the financial burden on individuals who are required to maintain liability insurance for their vehicles while promoting compliance with state insurance requirements.

Sentiment

The sentiment around HB89 appears largely positive, particularly among proponents who view the bill as a supportive move for taxpayers managing the costs of vehicle ownership. By providing a tax deduction, the bill is perceived to contribute positively to individual financial well-being. However, there may be some opposition or concern from fiscal conservatives regarding the potential reduction in state revenue, as tax deductions can lead to diminished tax collections.

Contention

While the bill outlines clear parameters for the deduction, including eligibility tied to minimum coverage requirements, it also raises questions about fiscal responsibility and its impact on state revenue. Some critics may argue that tax deductions should be limited, as they can create budgetary constraints in state funding for essential services. Therefore, the successful implementation of HB89 hinges on balancing the benefits of tax relief against the potential implications for state budgets.