Legislation that started to get a closer look by Capitol players late last week, due to its intent to lower the corporate income tax rate, failed to get a full hearing on Monday before the House Ways and Means Committee because its author asked for more time to tweak the proposal.
Rep. Kenny Havard, R-St. Francisville, said his HB 648 was incomplete as drafted and that the amendments he needed to get the legislation into the right posture were still being put together. He added that his goal is to get back in front of the committee by next week at the earliest with the finalized measure.
With his legislation Havard wants to lower the top corporate rate of 8 percent, which he called the “highest in the nation,” and move the state toward a flat tax. Havard is calling his concept the “Business Flat Tax,” and he told committee members it would not apply to Subchapter S corporations or limited liability companies.
The idea came under fire last week by Stephen Waguespack, the president of the Louisiana Association of Business and Industry, who called it the “governor’s backup plan.”
It was a clear reference to Gov. John Bel Edwards’ failed commercial activity tax on gross receipts.
Havard’s bill deals instead with gross margins.
“It will apply to profit and not receipts, making it completely different from the governor’s plan or the CAT tax,” says Havard. “It’s going to be completely different than that.”
He added that the legislation, once properly amended, would eliminate “loopholes” and remove or reduce certain tax credits and exemptions. If certain financial triggers are met, under Havard’s plan, even the franchise tax would be rolled back completely.
Havard offered an overall mission for the legislation in one sentence for the committee: “That all of our profitable corporate taxpayers pay at least little something so that other companies and individuals don’t have to make up the difference.”