Feb 15, 2016
From KPMG TaxWatch
On February 14, 2016, Louisiana legislators will convene in Baton Rouge at the request of new Governor John Bel Edwards to address the state’s fiscal crisis. The Bayou State is facing an estimated $750 million deficit in the current fiscal year ending June 30 and an estimated $1.9 billion shortfall in the next fiscal year. Although legislation enacted last year temporarily limited certain business deductions and credits, the Governor has indicated that further tax increases may be necessary. In the short-term, the Governor has proposed increasing the state level sales and use tax by one percent. This will “bridge the gap” until longer-term changes can be implemented. Other changes that may be considered are further changes to the net operating loss deduction, expansion of the sales tax base to certain services, eliminating an exemption for business utilities, and making certain personal income tax changes, such as raising rates on higher income households and eliminating the ability to deduct federal taxes paid in computing state income taxes. There were over 30 tax-related items listed in the Governor’s call for the special session, meaning they are areas in which legislation may be considered. The special session is necessary because, under Louisiana’s constitution, revenue raising measures cannot be introduced during the regular session in even-numbered years. Please stay tuned to TWIST for futures update on the special session, which is scheduled to run through March 9, 2016.
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The following information is not intended to be "written advice concerning one or more federal tax matters" subject to the requirements of section 10.37(a)(2) of Treasury Department Circular 230.
The information contained herein is of a general nature and based on authorities that are subject to change. Applicability of the information to specific situations should be determined through consultation with your tax adviser.