Louisiana’s 2023 Regular Legislative Session will convene on Monday, April 10th. This year’s Regular Session is fiscal in nature, meaning legislators face subject-matter limitations when filing bills. Legislators may file any bill that pertains to the list of fiscal issues provided in Article 3, Section 2 of the state’s constitution, but are limited to filing only five bills that do not fall within the bounds of these issues.
Over the past year, there has been extensive conversation surrounding Louisiana’s tax structure and how it can be improved to better position the state for the future. Many legislators are focused on phasing out and/or eliminating Louisiana’s income and franchise taxes to remain nationally competitive while others are more concerned with the potential fiscal cliff Louisiana may face when the state’s temporary sales tax rate expires in 2025. Ahead of the 2023 session, several legislators have filed bills addressing these and other issues pertaining to tax reform.
Below is a sampling of the bills filed as of March 30, 2023. To hear more about additional bills filed through the pre-file deadline, join our webinar on Tuesday, April 4, 2023. You can register to attend: bit.ly/3JNLWpo.
Income & Franchise Tax
SB1 (Allain) – Repeals the corporate franchise tax beginning Jan. 1, 2025.
SB3 (Allain) – Changes the date for which the individual income and corporate franchise tax automatic rate reduction triggers will take effect from April 1, 2024 to Jan. 1, 2024.
SB6 (Allain) – Reduces the rate of the Quality Jobs Program project facility expense rebate if corporate franchise automatic rate reduction conditions are met.
SB19 (Allain) – Eliminates the inventory tax credit for corporations, reduces corporate income tax rates for the first two tax brackets, and eliminates the top corporate income tax bracket.
HB145 (Wright) – Changes the individual income tax rates and brackets to a single flat rate of 4% beginning Jan. 1, 2024.
HB146 (Wright) – Changes the corporate income tax from graduated rates based on taxable income to a flat rate of 4% beginning Jan. 1, 2024.
HB173 (DeVillier) – Phases out the individual income tax over 5 years beginning Jan. 1, 2024 and repeals the automatic rate reduction if certain revenue conditions are met.
HB197 (DeVillier) – Phases out the corporate franchise tax over 5 years beginning Jan. 1, 2024.
HB214 (DeVillier) – Repeals the individual income tax, corporate income tax, and corporate franchise tax. Additionally repeals income and franchise tax exemptions, deductions, exclusions, and credits.
HB241 (Beaullieu) – Changes the individual income tax rates and brackets from a graduated rate system to a single flat rate of 3.49%.
HB246 (DeVillier) – Phases out the corporate income tax over 5 years beginning Jan. 1, 2024.
Sales & Use Tax
HB62 (Bacala) – Reduces the temporary state sales tax rate from 0.45% to 0.25% beginning July 1, 2024.
HB71 (Bishop) – Gradually reduces the temporary state sales tax rate from 0.45% to 0.15% over a two-year period beginning July 1, 2023.
HB157 (DeVillier) – Effective July 1, 2023, exempts steam, water, electric power or energy, natural gas, and other energy sources used directly in the manufacturing process from the 2% levy of the state’s composite sales and use tax.
HB171 (Beaullieu) – Revises certain conditions under which marketplace facilitators are required to collect and remit state and local sales and use tax on remote sales.
HB203 (DeVillier) – Constitutional amendment to repeal the state sales and use tax exemptions for food for home consumption, certain utilities for residential use, and prescription drugs.
HB204 (DeVillier) – Codifies in statute the constitutional sales and use tax exemption for electricity sold directly to the consumer for residential use; revises citations of law associated with sales and use tax exemptions for other residential utilities, food for home consumption, and prescription drugs.
HB257 (Wright) – Reduces the state sales and use tax rate from 4.45% to 4% and extends the sales and use taxes to digital goods delivered into Louisiana.
SB8 (Luneau) – Changes the applicable interest rate to the judicial interest rate for local sales and use taxes paid under protest. Additionally, eliminates the requirement that a taxpayer making a payment under protest pay additional interest.
Property Tax
SB2 (Allain) – Constitutional Amendment to phase out the inventory tax over 5 years & establish the maximum allowable exemption for ITEP to be 60% for school-related property taxes and 80% for all other property taxes.
SB5 (Allain) – Provides for alternatives in lieu of payment under protest for challenges to ad valorem tax assessments.
HB153 (DeVillier) – Constitutional amendment to phase-in a property tax exemption for business inventory over 4 years (2024-2027)
Severance Tax
HB172 (DeVillier) – Reduces the severance tax rate on oil over an 8-year period from 12.5% to 8.5% of its value at the time and place of severance and fixes the severance tax rate for oil produced from certain incapable and stripper wells at the current rate.
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For a complete list of 2023 tax legislation filed so far in Louisiana or for more information on Advantous’ legislative tracking services, please contact mary.robinson@advantous.com.