House Bill No. by Representative Hilferty proposes an amendment to Louisiana's individual income tax laws by establishing a deduction for net capital gains. Specifically, the bill introduces a new provision under R.S. 47:293(9)(a)(xvii) that allows taxpayers to deduct 50% of net capital gains recognized for federal income tax purposes, which arise from the sale or exchange of equity interests or substantially all assets of nonpublicly traded businesses domiciled in Louisiana. To qualify for this deduction, the taxpayer must have held the equity interest or assets for a minimum of five years prior to the sale or exchange.

Additionally, the bill amends R.S. 47:293(10) to include this deduction in the definition of "tax table income" for nonresident individuals. The Department of Revenue is tasked with promulgating regulations to streamline the administrative process for eligible taxpayers claiming this deduction, including rules on documentation and eligibility restrictions. The provisions of this bill will apply to sales or exchanges occurring on or after January 1, 2025, and it will take effect upon the governor's signature or after the designated time for gubernatorial action.

Statutes affected:
HB485 Original: 47:293(10)