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Louisiana enacts broad range of tax increases during recent special session

In an effort to cure an estimated $2 billion deficit in the FY 2017 budget, the Louisiana legislature passed a number of tax increases during a special session that concluded on March 6, 2016. The tax increases, which are contained in several different bills, were signed into law by Gov. John Bel Edwards on varying subsequent dates. The legislation expands the range of businesses that will be subject to the franchise tax. The most significant corporate income tax changes include a flat tax rate and elimination of the tax deduction for federal income taxes paid (both subject to voter approval), new related-party expense add-back requirements, the repeal of the three-year sunset of the tax rebate reductions, and changes in the use of net operating losses. The numerous sales and use tax changes include a new additional 1% sales tax, suspension of exemptions and exclusions from the existing sales tax components, and the enactment of click-through and affiliate nexus provisions. Finally, taxes on cigarettes and alcoholic beverages are increased.

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