House Bill No. by Representative McMakin proposes the enactment of R.S. 47:32.1, which establishes a framework for reducing the individual income tax rate in Louisiana under specific conditions starting January 1, 2027. The bill stipulates that the tax rate will be lowered if a certain amount of state general fund (direct) carried forward from the previous fiscal year is certified by the commissioner of administration and recognized by the Revenue Estimating Conference (REC) as nonrecurring revenues. The reduction will be calculated by the secretary of the Department of Revenue, aiming for a decrease that results in an estimated reduction in state income tax collections equal to fifty percent of the certified amount. However, if this calculation yields a reduction of five-hundredths of one percent or less, no rate reduction will take place.

Additionally, the bill mandates that the secretary of the Department of Revenue must publish the new reduced tax rate on the department's website and include it in the tax and withholding tables. The act is officially titled the "Louisiana Income Tax Elimination Act" or the "LITE Act" and is set to take effect on July 1, 2027. The proposed law retains the current individual income tax rate of 3% but introduces these new provisions for potential reductions based on the specified criteria.