Today, Louisiana Governor Edwards called for a special session of the Louisiana Legislature to begin on February 14, 2016 and end no later than March 9, 2016.  The session has been called to address the current year $700 million budget deficit and a number of tax issues, including:

1. Amend the Constitution “relative to deductible items in computing state income taxes” (expected to be the federal income tax deduction);

2. Adjust the rates and brackets for state income tax;

3. Increase the excise tax on cigarettes levied under R.S. 47:841(B);

4. Address the deduction for net operating loss, the computation of Louisiana net income, and the apportionment percent under the Louisiana corporation income tax;

5. Address the tax credit for investing in certain Louisiana-based investments by insurance companies;

6. Impose an additional state tax on the sale, use, lease or rental of tangible personal property and the sale of specifically enumerated services;

7. Address the exclusion for dividend income received from certain banking corporations and associations;

8. Address the exemption from taxation for the sale or use of natural gas, water, steam, electric power or energy sold for non-residential use and other business utilities;

9. Address the deductibility of federal income taxes paid in computing state income taxes;

10. Address the deductibility of excess federal itemized personal deductions in computing state income taxes;

11. Increase the tax on beverages of high and low alcoholic content;

12. Address the rate of vendor’s compensation for the state sales and use tax;

13. Address the discount provided to tobacco dealers;

14. Address the discount provided for reporting and remitting excise taxes on alcoholic beverages;

15. Address the state sales tax on interstate, international and intrastate telecommunications services;

16. Address the automobile rental tax;

17. Address tax credits eligible to be refunded from current collections of tax;

18. Address the Enterprise Zone Program;

19. Extent the corporation franchise tax to all entities taxed as corporations for federal income tax purposes;

20. Include the furnishing of sleeping rooms, cottages or cabins sales over the internet and sales at a residential location in the sales tax;

21. Legislate with regard to the imposition, collection and remittance of sales and use tax under R.S. 47:302 and to amend the definition of dealer;

22. Legislate with regard to tax credits paid on inventory, on vessels operating in the Outer Continental Shelf Lands Act Waters and on public service properties by telephone companies;

23. Legislate with regard to requiring the advance collection of state sales tax; and

24. Legislate with regard to exemptions and exclusions from state sales and use tax.

We will be closely following not only the special session, but also the upcoming regular session that begins on March 14, 2016, and will be providing updates on tax legislation and other tax implications.