Eliminates the deductibility of federal income taxes paid for purposes of calculating state individual income tax liability (EG SEE FISC NOTE GF RV)
Impact
The bill's impact is noteworthy as it shifts the tax responsibility towards individuals and entities who may have relied on the federal tax deduction to mitigate their state tax liabilities. This change is expected to affect the overall amount of revenue generated for the state, potentially leading to increased state funding but also raising concerns among taxpayers about their overall tax burden. The legislation specifies that the changes apply to taxable periods starting on January 1, 2018, contingent upon certain other legislative measures being enacted.
Summary
House Bill 358 focuses on amending Louisiana state tax laws by eliminating the deductibility of federal income taxes when calculating individual income tax liabilities. This significant shift in the tax framework is intended to adjust how state tax obligations are computed, affecting both individuals and corporations operating within Louisiana. By repealing the state provisions that allowed taxpayers to deduct federal taxes paid, the bill aims to align state income tax calculations more closely with federal guidelines while expanding the tax base for the state treasury.
Sentiment
Sentiment around the bill appears to be mixed, with some stakeholders arguing that the removal of deductibility is a necessary step towards simplifying and streamlining the tax code. Advocates believe this change could lead to a fairer taxation system. Conversely, opponents of the bill express concern that it may disproportionately affect lower and middle-income taxpayers who may find themselves paying higher taxes as a result. The discussion reflects broader debates within tax policy regarding equity and efficiency.
Contention
A notable point of contention regards how the repeal of the federal income tax deduction could lead to differing impacts among population segments. While proponents argue it will lead to a more robust tax system, critics warn it could impose additional financial strain on residents and potentially deter economic growth. Additionally, the bill's passage relies on several other amendments being approved, creating further uncertainty and debate among legislators and constituents alike.
Authorizes carry-back provisions for the net operating loss deduction for purposes of calculating corporate income tax (Item #20) (EG DECREASE GF RV See Note)
Reduces the rate of the individual income tax and authorizes an income tax deduction for taxpayers sixty-five years of age and older (RE -$377,900,000 GF RV See Note)
Concerning an expansion of the state income tax subtraction for retirement benefits to allow an individual to subtract all such benefits from federal taxable income for the purpose of calculating state taxable income.
Relates to the calculation of child support; provides that child support amounts shall be calculated based on the non-custodial parent's income; excludes health insurance costs and federal and state income taxes paid from the calculation of income for child support calculation purposes; makes related provisions.