New year brings new laws to Louisiana

The beginning of 2022 brought with it several new laws. Among the changes are new tax rates for individuals and businesses, a shorter deadline for how long prosecutors can detain a suspect for a misdemeanor offense, and greater access to medical marijuana. 

New tax rates

In November, Louisiana voters changed a provision in the state constitution to allow an overhaul of state income taxes, a long-sought goal of business organizations and corporate lobby groups.

Constitutional Amendment No. 2 is the backbone of the so-called “tax-swap” legislation that took effect on Jan. 1. Individuals and corporations will now pay lower state income tax rates but can no longer deduct the amount they pay in federal taxes on their state income tax returns. 

Louisiana’s top income tax bracket for individuals is now 4.25%, down from 6%, and is further capped at a maximum rate of 4.75%. Similarly, the top corporate tax rate is now 7.5%, down from 8%.

The amendment sets Louisiana up for additional tax cuts by making it much easier for the Louisiana Legislature to slash income and corporate franchise taxes in the future. It also removes the public’s ability to block the elimination of tax cuts in future years. 

The tax code revision is also poised to stabilize Louisiana’s tax revenue stream. Previously, taxpayers had to deduct what they owed in federal taxes on their state tax returns, often giving them a much lower state tax bill. However, tax policy experts pointed out this mandatory deduction effectively tied Louisiana’s income tax revenue to the federal government’s tax rates and created revenue volatility out of state lawmakers’ control. 

When federal rates were high, Louisiana taxpayers deducted more from their state returns, leading to less revenue for the state. When federal rates were low, the state got more revenue. The amendment allowed lawmakers to repeal that mandatory deduction, though they now have the power to reinstate it without voter approval. 

Pre-trial detention

Also taking effect is Act 252, which shortens the amount of time prosecutors can keep misdemeanor criminal suspects in jail without any formal charges. The limit has been shortened from 45 days to 30.

Louisiana has long been an outlier with its 45-day deadline for misdemeanors, 60 days for most felonies and 120 days for capital offenses. The state’s pretrial jail detention rate was more than three times the national average before the COVID-19 pandemic, according to an ACLU of Louisiana report. It found the average person is held in a Louisiana jail for 5 ½ months before trial or conviction.

Act 252, spearheaded by Rep. Ted James (D-Baton Rouge), sought to reduce the pre-trial detention deadlines for all suspected offenses, but opponents of the bill, such as the Louisiana District Attorneys Association, successfully lobbied for a watered-down version that applies to only misdemeanor offenses. 

Medical marijuana

Anyone with a doctor’s permission can now legally purchase raw smokable cannabis from any of Louisiana’s nine approved dispensary pharmacies. Act 424 took effect Jan. 1, ushering in the latest boost to a new Louisiana industry that has lagged behind other states.

Until now, patients had access only to medical marijuana in the form of edible gummies and processed oils. Proponents of the new law say it will provide patients with greater and cheaper access to the drug.

Act 424 comes on the heels of legislation passed in 2020 allowing any licensed physician in Louisiana to treat their patients with cannabis without first obtaining a special board qualification. Previously, Louisiana doctors were required to obtain an additional certification to prescribe the drug, but lawmakers removed that barrier.