A state constitutional amendment that promises to reduce the individual income tax rate for many Louisianans took effect on New Year’s Day.
Amendment 2, which passed in November with a margin of 54% to 46%, decouples individual income tax rates from the federal government by removing the federal income tax deduction and lowering the top rate from 6% to 4.25%. Many small business owners pay taxes at the individual rate rather then the corporate rate.
The amendment, which we strongly supported, also eliminates the corporate franchise tax on the first $300,000 of taxable income for small business owners.
“The reform measures put in place by the passage of this amendment will be beneficial to small business owners by giving them a more simplified and predictable tax code that won’t change at the whim of federal tax changes,” NFIB State Director Dawn McVea said. “Additionally, future rate reductions are available should Louisiana’s economy grow.
“All in all the passage of Amendment 2 means progress for Louisiana and our small business owners,” she said. “NFIB will continue to support legislation that will improve the burden small business owners face when it comes to the overly complex sales tax structure Louisiana has.”
