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Aug 2, 2021 · Learn more about the 2021 Louisiana tax plan, including how it would affect tax complexity and tax burdens. See more on the 2021 Louisiana tax reform plan.
During the 2021 Regular Legislative Session, a package of bills was passed that made significant changes to three major taxes affecting individuals and businesses in the state; the individual income tax, the corporate income tax, and the corporate franchise tax.
- If Passed, Louisiana Will Take in About The Same Amount of Tax Revenue
- State Tax Collections Would Stay Mostly The Same, But Your Tax Bill Might Change
- Individuals Who Claim Excess Itemized Deductions Are Likely to See A Tax Hike
- Income Taxes Would Be Permanently Capped at A Lower Rate
- It Will Be Easier For Louisiana Lawmakers to Eliminate The Income Tax Entirely
- Business and Personal Taxes Could Automatically Be Cut Further
- Supporters Contend Lowering Tax Rates Will Attract More Business to Louisiana
- Opponents Say The Ballot Language Is Misleading and Confusing
- Learn More
Amendment 2 is not supposed to result in an immediate tax cut or tax hike for the state overall, despite lowering income tax rates for both people and corporations. That income tax rate reduction is supposed to be offset by the elimination of the state’s federal income tax deduction, the elimination of almost all excess itemized deductions and a re...
Even if state tax collections are supposed to remain even, that doesn’t mean individual tax filers won’t experience changes to their personal tax bills. In general, most household tax filers are expected to see their tax bills either stay the same or go down slightly. On the corporate side, Albrecht expects smaller corporations that pay income tax ...
People across several tax brackets who claim excess itemized deductions are more likely to see a tax hike if the tax package goes into effect, but this is a fairly small percentage of Louisiana’s population. Only 7% of state residents paying income taxes take advantage of excess itemized deductions.
The state constitution now limits the highest personal income tax rate to 6%, but the amendment would lower that cap it at 4.75%. To go higher, state voters would have to approve another constitutional amendment. The Legislature could not raise the rate past 4.75% on its own. The cap on the corporate tax rate would similarly move from 8% to 7.5%.
The amendment would also get rid of the floor for the income tax. Currently, anyone who pays personal income taxes must pay a rate of at least 2%. But the amendment would open the door to the Legislature eliminating state income tax entirely in the future. The current proposal does not eliminate the income tax. The lowest-income tax filers would st...
The package includes a “trigger” that would result in personal and business taxes being cut automatically if certain tax collection goals are met. If tax collections soared, a provision would require income tax rates to automatically go down and the corporate franchise tax to be reduced or eliminated. Advocates for low-and-moderate income people ar...
One of the ultimate goals is to improve Louisiana’s rating with national organizations that track tax policy in hopes of attracting more business to the state. Advocates say Louisiana’s current income tax rates are some of the highest in the country and discourage outside investors from coming to the state. If the tax package passes, Louisiana’s ne...
Opponents say the ballot language implies everyone will receive a tax cut if the amendment passes. As discussed above, some people and businesses are expected to see their taxes increase if the tax package is approved. The ballot language makes mention of “allowing a federal income tax deduction” on top of lowering income tax rates. But it doesn’t ...
For specifics on how each type of tax filer — single, widowed, married — will be affected, you can read Albrecht’s granular analysis at bit.ly/LaAmend2. The Public Affairs Research Council has a comprehensive guide to all four constitutional amendments at parlouisiana.org. The Louisiana Illuminatoris an independent, nonprofit, nonpartisan news orga...
Oct 29, 2021 · If the amendment passes, Louisiana would have more control over its tax collections in general. By eliminating the federal tax deduction from the state tax code, Louisiana would be breaking the link between federal tax policy and state tax collections.
Apr 28, 2021 · Louisiana lawmakers will be considering a range of tax reform bills, but the primary effort has been spearheaded by Sen. Brett Allain (R) and Rep. Stuart Bishop (R), who have been facilitating discussions about improving the state tax code and gathering support for their policy priorities.
Dec 30, 2021 · The purpose of this guidance is to explain changes to Louisiana’s individual income tax. 2 and to encourage taxpayers to review their withholdings and estimated tax payments beginning with the 2022 tax year. Note that there is no impact to the 2021 tax returns due May 16, 2022. Constitutional Changes to Individual Income Tax
Mar 1, 2021 · The work of revamping the state's tax system, which has been going on for weeks behind the scenes, became public Friday when Senate President Page Cortez released a letter signed by leaders in...
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