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2400 Veterans Blvd.,
Suite 500 Kenner, LA 70062 (504) 464-1040 1-800-288-5272 |
Stelly Plan's Tax Changes In Effect January 2003 The fiscal analysis of "The Stelly Plan" indicates the tax swap will reduce the "overall" tax burden on 84 percent of the state's personal taxpayers. The tax change will take effect January 2003 when the state sales tax (local taxes were not affected) on food and residential utilities will drop form 3.9 percent to 2 percent and personal income tax brackets will be compressed. The remaining 2 percent in sales taxes on food and utilities will be removed July 1. The income tax changes will be fully implemented in January. 1-2 percent on adjusted gross earning up to $25,000 a year, 4 percent on $25,001 to $50,000 and 6 percent above $50,000. Also, the deductibility for excess federal itemized deductions will be eliminated. The Legislative Fiscal Office (LFO) says the immediate effect of the tax swaps will be a loss of $9 million in net tax revenues for the current fiscal year. But, there will be a growth of $4 million in state revenue for fiscal 2003-04, the first full year the plan will be in effect. In the first year, the state will lose $240 million in sales tax revenue, but that will be offset by a $244 million increase in personal income taxes, according to the LFO. The passage of The Stelly Plan will result in revised withholding tables for employers. The new tables are available on the Louisiana Department of Revenue’s Web site at http://www.rev.state.la.us. Revenue Secretary Cynthia Bridges said printed versions of the withholding tables are being prepared and will be available in December. The January/February issue of Lagniappe will cover the details of The Stelly Plan and the tax considerations for practitioners and their clients.
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Society of Louisiana Certified
Public Accountants | 2400 Veterans Blvd., Suite 500 • Kenner, LA
70062 | (504) 464-1040 • 1-800-288-5272
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