Published: June 5, 2020
By: By Catherine Hunt, LSU Manship School News Service
BATON ROUGE — A Senate committee advanced a bill Friday that would suspend franchise taxes for small business corporations in Louisiana.
The bill was passed in a special legislative session that is focused on finishing a $33 billion budget for next fiscal year and considering tax cuts for businesses hurt by the coronavirus pandemic.
The franchise-tax bill, by Sen. Bret Allain, R-Franklin, is one of 15 bills approved for debate that aims to suspend or cut taxes on businesses as they recover from the coronavirus shutdown.
Franchise taxes are imposed on businesses operating in the state. Businesses must pay $1.50 in taxes for each $1,000 of capital and $3 for each $1,000 in excess of $300,000 of capital.
Allain’s bill would suspend the corporation franchise tax on the first $300,000 of taxable capital for small businesses. That change would cost the state $5.4 million in lost revenues in the fiscal year beginning July 1.
The cuts in business taxes were proposed by a task force formed by Senate President Page Cortez and Speaker of the House Clay Schexnayder, both Republicans.
In the regular session that ended Monday, legislators passed a Republican plan that would use $300 million out of $811 million of federal COVID-19 relief money to provide grants to small businesses.
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