The Louisiana legislature approved a budget package, adopting a number of temporary tax increases affecting individual (personal) and corporate taxpayers, and thereby sending the package to the governor for signature.
Instead of increasing the tax rates, the lawmakers passed several bills that would reduce or give a “haircut” to certain individual income tax, corporate income tax or franchise tax exclusions, deductions, and credits for the next three years. These reductions or limitations would be effective for all tax returns filed on or after July 1, 2015, through June 30, 2018, regardless of the tax year to which the return relates. For all original returns filed on or after July 1, 2018, the pre-July 1, 2015 law would be restored (i.e., the limited credits and deductions would once again be allowed in full).
Special provisions would apply to returns that have been validly extended prior to July 1, 2015. Specifically, amounts that cannot be deducted or credits that cannot be claimed due to the new limitations would be allowed in one-third increments as a deduction or credit on the taxpayer’s return for each of the tax years beginning during the 2017, 2018, and 2019 calendar years.
The limits on credits and deductions would not apply to amended returns filed on or after July 1, 2015, that relate to original returns on which the credit or deduction was “properly” filed prior to July 1, 2015.
Read a June 2015 report [PDF 77 KB] prepared by KPMG LLP: Louisiana: Budget agreement includes tax increases affecting certain returns filed on or after July 1, 2015
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