Louisiana Gov. Bobby Jindal has signed a bill lowering the state income tax rate on individual incomes between $25,000 and $50,000 from the current 6% to a new rate of 4%. The income level is doubled for married taxpayers filing joint returns.

SB 787, sponsored by Sen. Buddy Shaw, R-Shreveport, repeals the Stelly tax law, which raised income tax rates in exchange for eliminating the state sales tax on groceries. The plan, which was approved by voters in 2002, was named for its sponsor, Rep. Vic Stelly, R-Moss Bluff.

The measure is expected to reduce state revenue by $359 million in fiscal 2010, $251 million in fiscal 2011, $262 million in fiscal 2012, and $273 million in fiscal 2013.

The new rates take effect Jan. 1, but Louisiana will not revise the withholding schedules until the beginning of fiscal 2010 in July 2009.

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