Louisiana HB 279: TAX/CORP FRANCHISE: Phases-out the corporation franchise tax over a certain period of time (OR -$397,000,000 GF RV See Note)

Bill Text

HLS 21RS-142 ORIGINAL
2021 Regular Session
HOUSE BILL NO. 279
BY REPRESENTATIVES DEVILLIER, BEAULLIEU, BISHOP, AND IVEY
TAX/CORP FRANCHISE: Phases-out the corporation franchise tax over a certain period
of time
1 AN ACT
2 To amend and reenact R.S. 47:601(A), (B), and (C)(2) and to enact R.S. 47:611(C), relative
3 to the corporate franchise tax; to provide for the rate of the corporate franchise tax;
4 to provide for a reduction and eventual elimination of the corporate franchise tax; to
5 prohibit the levy of an initial tax under certain circumstances; to provide for
6 applicability; to provide for an effective date; and to provide for related matters.
7 Be it enacted by the Legislature of Louisiana:
8 Section 1. R.S. 47:601(A), (B), and (C)(2) are hereby amended and reenacted and
9 R.S. 47:611(C) is hereby enacted to read as follows:
10 §601. Imposition of tax
11 A.(1) Except as provided for in Paragraph (2) of this Subsection, every
12 Every domestic corporation and every foreign corporation, exercising its charter, or
13 qualified to do business or actually doing business in this state, or owning or using
14 any part or all of its capital, plant, or any other property in this state, subject to
15 compliance with all other provisions of law, except as otherwise provided for in this
16 Chapter shall pay an annual tax at the rate of one dollar and fifty cents for each one
17 thousand dollars, or major fraction thereof on the first three hundred thousand dollars
18 of taxable capital and at the rate of three dollars for each one thousand dollars, or
19 major fraction thereof, which exceeds three hundred thousand dollars of taxable
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CODING: Words in struck through type are deletions from existing law; words underscored
are additions.

HLS 21RS-142 ORIGINAL
HB NO. 279
1 capital. Taxable capital shall be determined as hereinafter provided. The tax levied
2 herein is due and payable on any one or all of the following alternative incidents:
3 (1)(a) The qualification to carry on or do business in this state or the actual
4 doing of business within this state in a corporate form. The term "doing business"
5 as used herein shall mean and include each and every act, power, right, privilege, or
6 immunity exercised or enjoyed in this state, as an incident to or by virtue of the
7 powers and privileges acquired by the nature of such organizations, as well as, the
8 buying, selling, or procuring of services or property.
9 (2)(b) The exercising of a corporation's charter or the continuance of its
10 charter within this state.
11 (3)(c) The owning or using any part or all of its capital, plant, or other
12 property in this state whether owned directly or indirectly by or through a
13 partnership, joint venture, or any other business organization of which the domestic
14 or foreign corporation is a related party as defined in R.S. 47:605.1.
15 (2) The tax levied pursuant to the provisions of this Chapter shall be limited
16 to the following percentages of the amount otherwise levied pursuant to the
17 provisions of this Chapter:
18 (a) For taxable years beginning on or after January 1, 2023, and before
19 January 1, 2024, eighty percent.
20 (b) For taxable years beginning on or after January 1, 2024, and before
21 January 1, 2025, sixty percent.
22 (c) For taxable years beginning on or after January 1, 2025, and before
23 January 1, 2026, forty percent.
24 (d) For taxable years beginning on or after January 1, 2026, and before
25 January 1, 2027, twenty percent.
26 (e) For taxable years beginning on or after January 1, 2027, no corporation
27 franchise tax shall be assessed, levied, or collected by the state nor paid by domestic
28 or foreign corporations on taxable capital.
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CODING: Words in struck through type are deletions from existing law; words underscored
are additions.

HLS 21RS-142 ORIGINAL
HB NO. 279
1 B. It is the purpose of this Section to require the payment of this tax to the
2 state of Louisiana by domestic corporations for the right granted by the laws of this
3 state to exist as such an organization, and by both domestic and foreign corporations
4 for the enjoyment, under the protection of the laws of this state, of the powers, rights,
5 privileges, and immunities derived by reason of the corporate form of existence and
6 operation. The tax hereby imposed pursuant to the provisions of this Chapter shall
7 be in addition to all other taxes levied by any other statute.
8 C.
9 * * *
10 (2) The term "foreign corporation" shall mean and include all such business
11 organizations as hereinbefore described in this Paragraph (1) of this Subsection
12 which are organized under the laws of any other state, territory or district, or foreign
13 country.
14 * * *
15 §611. Newly taxable corporation
16 * * *
17 C. For taxable years beginning on or after January 1, 2027, no initial tax
18 shall be assessed, levied, or collected by the state nor paid by domestic or foreign
19 corporations.
20 Section