Senators hear package to cut income taxes, repeal franchise tax and sunset incentives

Lawmakers and administration officials spent substantial portion of the Nov. 17 Revenue and Fiscal Affairs hearing presenting a linked package of bills designed to reshape Louisiana’s tax code.

Representative Emerson and Revenue Secretary Richard Nelson described HB1 as a move to a flat individual rate (3%) with a raised standard deduction that eliminates tax for the lowest‑income bracket. HB2 would compress corporate brackets toward 3.5% via a staged reduction. HB3 would repeal the corporate franchise tax — a levy on capital — that currently nets the state roughly $400 million annually after credits. Sponsors framed the three bills as an integrated effort to make Louisiana more competitive with neighboring states while using base expansions to offset revenue losses.

Susan Bourgeois, secretary of Louisiana Economic Development, and other witnesses said the administration intends to sunset many targeted tax credits (film, historic, inventory) on June 30, 2025, and to return with a strategic, project‑based incentive package after a strategic plan is completed in February. Bourgeois emphasized that applications and contracts approved under existing rules before the sunset date would be honored. Nelson and Bourgeois said the plan aims not to create large winners or losers and that the team is negotiating amendments to preserve critical programs where warranted.

Senators repeatedly questioned the distributional effects of cutting income taxes while potentially expanding sales taxes and other bases. Several members pressed for specifics on how lost revenue would be replaced at state and parish levels and insisted on protections for workers, retirees and local governments that rely on current credits and collections. The committee took comment from dozens of stakeholders — including film industry leaders, developers, religious groups and large employers — describing mixed views on the tradeoffs.

No votes were taken; the committee deferred HB1–3 to reconvene the next day to allow further amendment work and fiscal recalculations.