TAX/INCOME TAX: Provides for a reduction in the rate of the state tax levied on individuals under certain circumstances (OR DECREASE GF RV See Note)

HLS 26RS-394 ORIGINAL
2026 Regular Session
HOUSE BILL NO. 898
BY REPRESENTATIVE MCMAKIN
TAX/INCOME TAX: Provides for a reduction in the rate of the state tax levied on
individuals under certain circumstances
1 AN ACT
2 To enact R.S 47:32.1, relative to individual income tax; to provide for the reduction of the
3 individual income tax rate under certain circumstances; to provide for requirements
4 and limitations; to require the publication of certain information; to provide for an
5 effective date; and to provide for related matters.
6 Be it enacted by the Legislature of Louisiana:
7 Section 1. R.S. 47:32.1 is hereby enacted to read as follows:
8 §32.1. Individual income tax rate reduction; requirements and limitations
9 A. Beginning January 1, 2027, the individual income tax rate provided for
10 in R.S. 47:32 for the tax year beginning the following January first shall be reduced
11 in accordance with the provisions of Subsection B of this Section if an amount of
12 state general fund (direct) carried forward at the close of the previous fiscal year is
13 certified by the commissioner of administration to the Joint Legislative Committee
14 on the Budget pursuant to the provisions of R.S. 39:75(A)(3)(a) and that amount is
15 recognized by the Revenue Estimating Conference as nonrecurring revenues.
16 B. The individual income tax rate reduction shall be calculated by the
17 secretary of the Department of Revenue. The secretary shall reduce the individual
18 income tax rate by a percentage that generates an estimated reduction in state
19 individual income tax collections equal to fifty percent of the amount certified by the
20 commissioner of administration and recognized by the Revenue Estimating
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CODING: Words in struck through type are deletions from existing law; words underscored
are additions.
HLS 26RS-394 ORIGINAL
HB NO. 898
1 Conference as nonrecurring revenues. However, if the individual income tax rate
2 reduction as calculated by the secretary of the Department of Revenue would result
3 in a reduction of five-hundredths of one percent or less, then no rate reduction shall
4 occur.
5 C. When the provisions of Subsection B of this Section require a reduction
6 in the individual income tax rate, the secretary of the Department of Revenue shall
7 publish the reduced rate on the department's website and shall include the reduced
8 rate when publishing the tax tables pursuant to R.S. 47:295 and the withholding
9 tables pursuant to R.S. 47:112.
10 Section 2. This Act shall be known and referenced as the "Louisiana Income Tax
11 Elimination Act" or the "LITE Act".
12 Section 3. This Act shall become effective on July 1, 2027.
DIGEST
The digest printed below was prepared by House Legislative Services. It constitutes no part
of the legislative instrument. The keyword, one-liner, abstract, and digest do not constitute
part of the law or proof or indicia of legislative intent. [R.S. 1:13(B) and 24:177(E)]
HB 898 Original 2026 Regular Session McMakin
Abstract: Enacts the "La. Income Tax Elimination Act" which requires a reduction in the
individual income tax rate when the Revenue Estimating Conference (REC)
recognizes nonrecurring revenues.
Present law requires a state tax to be assessed, levied, collected, and paid upon the net
income of individuals at the rate of 3%.
Proposed law retains present law but requires, beginning Jan. 1, 2027, the individual
income tax rate for the tax year beginning the following January first to be reduced if an
amount of state general fund (direct) carried forward at the close of the previous fiscal
year is certified by the commissioner of administration to the Joint Legislative
Committee on the Budget pursuant to present law and that amount is recognized by the
REC as nonrecurring revenues.
Proposed law requires the secretary of the Dept. of Revenue (DOR) to calculate the rate
reduction by reducing the rate by a percentage that generates an estimated reduction in
state individual income tax collections equal to 50% of the amount certified by the
commissioner of administration and recognized by the REC as nonrecurring revenues.
However, if the rate reduction as calculated by the secretary of DOR would result in a
reduction of .05% or less, then no rate reduction shall occur.
Proposed law requires the secretary of DOR to publish the reduced rate on the
department's website and to include the reduced rate when publishing the tax tables and
the withholding tables pursuant to present law.
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CODING: Words in struck through type are deletions from existing law; words underscored
are additions.
HLS 26RS-394 ORIGINAL
HB NO. 898
Effective Jan. 1, 2027.
(Adds R.S. 47:32.1)
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CODING: Words in struck through type are deletions from existing law; words underscored
are additions.