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BATON ROUGE - A new national study released today by the Multistate Tax Commission (MTC) estimates that Louisiana corporate income tax revenues were lower by between $44 million and $94 million in 2001 as a result of corporate tax sheltering activities. Department of Revenue Secretary Cynthia Bridges notes that the estimated loss is substantial since a total of only $293 million in state corporate income taxes was collected in 2001.
The new MTC report says the lost revenue is attributable to domestic and international income tax sheltering and adds to the size of budget deficits in many states. The report points out that it is not enough to say that state corporate tax revenues are declining because of federal tax law changes or state tax-cutting during the 1990’s. Much of the decline is attributed by the report to a growing number of corporations that are increasingly taking advantage of structural weaknesses and loopholes in state corporate tax systems.
The Multistate Tax Commission was created in 1967 and now has 45 state governments participating. The Commission encourages states to adopt uniform tax laws and regulations that apply to multistate and multinational enterprises. Greater uniformity in multistate taxation reduces compliance burdens for multistate businesses and helps ensure that interstate commerce is neither undertaxed nor overtaxed.
The full text of the MTC study, including rankings for individual states, is available on the Internet at http://www.mtc.gov/statebudgetcrisis.html.
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