New Orleans, Louisiana 2021-06-10 16:14:24 –
Baton Rouge – On the final day of the 2021 regular meeting, the Louisiana State Senate gives the final passage to a complex tax review that supporters want to make the state more attractive to businesses and residents. I did.
Voters will have final say in October, but the package is now heading to the governor’s desk.
“We’ve been working on this for over a year,” said Senator Brett Alan, who chairs the tax committee of his chamber of commerce.
Democratic Governor John Bel Edwards upheld the Republican-led parliament’s statement of a goal of lowering tax rates and expanding the tax base as long as the change was “revenue-neutral,” but publicly on certain bills. I don’t take a typical position.
Louisiana’s tax system is complex, and high income tax rates can scare people who might otherwise want to move and invest in the state, overhaul supporters said.
Senate Bill 159 It gives voters the opportunity to remove the constitutional guarantee that taxpayers can deduct federal income tax payments from state income tax. Anomalous tax incentives can link state taxation to federal taxation and cause state budget problems if the federal government raises taxes.
In exchange for waiving the exemption, the state’s highest income tax rate is set at 4.75% by the Constitution, compared to the current maximum tax rate of 6%. The bill will also take references to other tax systems from the Constitution and allow lawmakers to set those tax rates in legislation.
If voters approve the amendment House building 278 Establish those rates. The current personal income tax rates of 2% for the first $ 12,500, 4% for the next $ 37,500 and 6% above $ 50,000 will be reduced to 1.85%, 3.5% and 4.25%, respectively.
House building 292 The five corporate income tax categories are grouped into three. The first $ 50,000 is 3.5%, the second $ 100,000 is 5.5%, and income above $ 150,000 is 7.5%.
Senate Bill 161 Permanently exempt state corporate franchise tax on the first $ 300,000 of taxable capital. This exempts most businesses. Above that level, the rate drops from $ 3 to $ 2.75 per $ 1,000.
As with other bills in the package, prices will drop even further when state revenue growth reaches a certain trigger and the rainy day’s funding fills about two-thirds.
Senator Karen Carter Peterson, a Democrat in New Orleans, opposed including the highest tax rate in the Constitution. This will require the legislature to pass another amendment and hold another general vote if the tax rate needs to be adjusted.
“I don’t think it’s a wise public policy,” she said.
Alain argued that it is fair to also give constitutional status with a lower highest income tax rate, as taxpayers give up on constitutionally protected tax cuts.
The House of Representatives approved all four items on Wednesday. The Senate gave SB161 a final pass on Wednesday and submitted three other bills on Thursday.
Louisiana Legislature Gives Final Passage to Tax Swap Source link Louisiana Legislature Gives Final Passage to Tax Swap