HLS 11RS-822 ORIGINAL
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Regular Session, 2011
HOUSE BILL NO. 269
BY REPRESENTATIVE HINES
TAX CREDITS: Provides for the taxable periods in which angel investor tax credits may
be granted and provides relative to the amount of the tax credit
AN ACT1
To amend and reenact R.S. 47:6020.1(A), (B)(2)(a) and (c), and (C)(1)(introductory2
paragraph), 6020.2(A)(1) and (2)(a), (b), and (c), and 6020.3 and to enact R.S.3
47:6020.1(D), relative to tax credits; to provide relative to the Angel Investor Tax4
Credit Program; to provide for the amount of the tax credit; to provide for the5
maximum amount of tax credits which may be granted in a year; to authorize the6
Department of Economic Development to determine the method of awarding tax7
credits; to provide for the taxable periods in which the credit may be granted; to8
provide relative to the repayment, recapture, or recovery of tax credits under certain9
circumstances; to authorize the collection of interest under certain circumstances; to10
provide for an effective date; and to provide for related matters.11
Be it enacted by the Legislature of Louisiana:12
Section 1. R.S. 47:6020.1(A), (B)(2)(a) and (c), and (C)(1)(introductory paragraph),13
6020.2(A)(1) and (2)(a), (b), and (c), and 6020.3 are hereby amended and reenacted and R.S.14
47:6020.1(D) is hereby enacted to read as follows: 15
§6020.1. Angel Investor Tax Credit Program; establishment; qualifications;16
administration17
A. Qualifying individuals or entities that invest in a Louisiana18
Entrepreneurial Business as defined by R.S. 51:2303(5) may earn, apply for, and be19
granted a refundable tax credit on any Louisiana income or corporation franchise tax20 HLS 11RS-822 ORIGINAL
HB NO. 269
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liability. Such credits shall be earned and granted for a period of five tax years as1
provided in this Part. The administration of applications for these credits and the2
provision of these credits shall be called the Angel Investor Tax Credit Program.3
B.4
* * *5
(2) In providing for the implementation and administration of the program,6
the department shall work closely with the secretary of the Department of Revenue7
in order to promulgate rules. Such rules shall include provisions for:8
(a) The Department of Economic Development to certify the eligibility of9
any taxpayer applicant for receipt of the tax credit provided for in this Part and the10
qualification of any taxpayer claimant to claim the credit against state tax liability.11
* * *12
(c) Provide for The presentation by the applicant or claimant of an annual13
report of the Louisiana Entrepreneurial Business regarding the use of proceeds,14
number of employees, amount of payroll, annual revenue, and any other information15
requested by the Department of Economic Development.16
C.(1) To qualify for an angel investor tax credit for five tax years all of the17
following qualifications shall be required by each applicant:18
* * *19
D. The Angel Investor Tax Credit Program shall be applicable for all taxable20
periods beginning on and after January 1, 2012, through all taxable periods ending21
on December 31, 2016. This program shall become null and void on January 1,22
2017.23
§6020.2. Angel Investor Tax Credit; amount; duration; forfeit24
A.(1) Except as provided in Subsection B of this Section, the taxpayer may25
earn and apply for and, if qualified, be granted a refundable credit on any income or26
corporation franchise tax liability owed to the state by the taxpayer seeking to claim27
the credit, in the amount approved by the secretary of the Department of Economic28
Development for based on the amount of money invested by the taxpayer in the29 HLS 11RS-822 ORIGINAL
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Louisiana Entrepreneurial Business, which. Tax credits granted pursuant to the1
provisions of this Section shall not exceed one million dollars per year per business2
and two million dollars total per business. Except as otherwise provided in this3
Paragraph, the refundable credit shall be allowed against the income tax for the4
taxable period in which the credit is earned and the franchise tax for the taxable5
period following the period in which the credit is earned. However, credits earned6
on or before December 31, 2005, shall not be allowed until the income tax period7
beginning January 1, 2006, and the franchise tax due January 1, 2007. All tax credits8
shall be divided into equal portions to be applied over five consecutive tax years9
beginning with the taxable period in which the credit is granted for individual or10
corporation income tax purposes, and the taxable period following the period in11
which the credit is granted for franchise tax purposes.12
(2)(a) The credits approved by the Department of Economic Development13
shall be granted at the rate of fifty percent of the amount of money invested by the14
taxpayer in the Louisiana Entrepreneurial Business, with the credit divided in equal15
portions for five years, subject to the limitations provided for in Paragraph (1) of this16
Subsection. Tax credits may be granted in an amount equal to a percentage of the17
amount of money invested by the taxpayer in a Louisiana Entrepreneurial Business18
as follows:19
(i) From January 1, 2012, through December 31, 2012, fifty percent.20
(ii) From January 1, 2013, through December 31, 2013, forty-five percent.21
(iii) From January 1, 2014, through December 31, 2014, forty percent.22
(iv) From January 1, 2015, through December 31, 2015, thirty-five percent.23
(v) From January 1, 2016, through December 31, 2016, thirty percent.24
(b) The total angel investor tax credits granted by the Department of25
Economic Development in any calendar year shall not exceed five million dollars per26
calendar year. The department shall by rule establish the method of allocating27
available tax credits to applicants, including but not limited to a first-come first-28
served system, reservation of tax credits for a specified time period, or other method29 HLS 11RS-822 ORIGINAL
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which the department, in its discretion, may find beneficial to the program. In the1
event the total amount of credits granted in any calendar year is less than five million2
dollars, any residual amount of unused credits shall carry forward for use in3
subsequent years and may be granted in subsequent years in addition to the annual4
five million dollar limit; however, no tax credit shall be granted after December 31,5
2016.6
(c) After certifying the eligibility of the investor, the Louisiana7
Entrepreneurial Business, and the amount of the investment, the Department of8
Economic Development shall issue a tax credit certificate, a copy of which is to be9
attached to the tax return of the angel investor. The tax credit certificate shall10
contain the taxpayer's name, address, tax identification number, the amount of credit,11
the name of the qualifying business, and other information required by the12
Department of Revenue. The tax credit certificate, unless rescinded by the13
Department of Economic Development, shall be accepted by the Department of14
Revenue as proof of the credit.15
* * *16
§6020.3. False or fraudulent information in making application, claim for credit, or17
other instrument; repayment, recapture, or recovery of credits; penalties18
A. Any person making an application, claim for an angel investor tax credit,19
or any report, return, statement, or other instrument or providing any other20
information pursuant to the provisions of the Angel Investor Tax Credit Program21
who willfully makes a false or fraudulent application, claim, report, return,22
statement, invoice, or other instrument or who willfully provides any false or23
fraudulent information, any person who willfully aids or abets another in making24
such false or fraudulent application, claim, report, return, statement, invoice, or other25
instrument, or any person who willfully aids or abets another in providing any false26
or fraudulent information, shall be guilty, upon conviction, of a felony and shall be27
punished by the imposition of a fine of not less than one thousand dollars and not28 HLS 11RS-822 ORIGINAL
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more than fifty thousand dollars or imprisoned for not less than two years and not1
more than five years, or both.2
B. At any time within the two tax years after the last tax year in which tax3
credits are issued with respect to a business, if the business is no longer domiciled4
in Louisiana, the business and its owners shall repay to the Department of Revenue,5
the total amount of angel investor tax credits issued with respect to the business, and6
investment in the business shall no longer be eligible for tax credits.7
C. At any time within the three tax years after the year of investment, if the8
investment is repaid or used for any other unauthorized use as determined by the9
Department of Economic Development, tax credits issued with respect to the10
business shall be subject to recapture or repayment by the business or investor, or11
both, as determined by the Department of Economic Development and the12
Department of Revenue, and investment in the business shall no longer be eligible13
for tax credits.14
D. Tax credits granted according to the provisions of this Section but later15
disallowed in whole or in part, or subject to recapture or repayment may be16
recovered by the Department of Revenue from the taxpayer applicant through any17
collection remedy authorized by R.S. 47:1561 and initiated within three years from18
December thirty-first of the year in which the tax credit was originally granted.19
Interest may be assessed and collected on these recovered tax credits, but the rate of20
interest shall be limited to a rate three percentage points above the rate provided for21
in R.S. 9:3500(B)(1), which shall be computed from the original due date of the22
return which the disallowed credit was taken.23
B.E. Any person convicted of a violation of this Section shall be liable for24
the repayment of all credits which were granted to that person. Interest shall be due25
on such repayments at the rate of fifteen percent per annum.26
Section 2. The provisions of this Act shall become effective on January 1, 2012.27 HLS 11RS-822 ORIGINAL
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DIGEST
The digest printed below was prepared by House Legislative Services. It constitutes no part
of the legislative instrument. The keyword, one-liner, abstract, and digest do not constitute
part of the law or proof or indicia of legislative intent. [R.S. 1:13(B) and 24:177(E)]
Hines HB No. 269
Abstract: Authorizes issuance of the angel investor tax credit for all taxable periods
beginning on and after Jan. 1, 2012, through all taxable periods ending on Dec. 31,
2016. Requires the tax credit amount to be based on the percentage of money
invested by the taxpayer in a La. Entrepreneurial Business.
Present law authorizes a credit against La. income and corporation franchise tax liability for
qualifying individuals or entities which invest in a "La. Entrepreneurial Businesses", which
has been approved by the Dept. of Economic Development (hereinafter department).
Present law authorizes credits for up to $1 million per year per business, not to exceed $2
million per business. The amount of the credit is 50% of the amount of money invested, to
be divided into equal portions over five years.
Present law limits the total amount of credits which the department may grant each calendar
year to $5 million.
Proposed law retains present law with respect to the $5 million annual limit, and provides
that, in the event the total amount of credits granted by the department in any year is less
than $5 million, any residual amount of unused credits shall be carried forward for use in
subsequent years and may be granted in addition to the $5 million annual limit.
Proposed law provides that the amount of the tax credit may be equal to a percentage of the
amount of money invested by the taxpayer in a La. Entrepreneurial Business as follows:
(1)From Jan. 1, 2012, through Dec. 31, 2012, 50%.
(2)From Jan. 1, 2013, through Dec. 31, 2013, 45%.
(3)From Jan. 1, 2014, through Dec. 31, 2014, 40%.
(4)From Jan. 1, 2015, through Dec. 31, 2015, 35%.
(5)From Jan. 1, 2016, through Dec. 31, 2016, 30%.
Proposed law authorizes the department to establish by rule the method of allocating
available tax credits to applicants, which may include a first-come first-served system,
reservation of tax credits for a specified time period, or other method which the department
deems appropriate.
Present law provided for the sunset of the Angel Investor Tax Credit Program on Dec. 31,
2009.
Proposed law provides that the provisions of the Angel Investor Tax Credit Program shall
be applicable for all tax periods beginning on and after Jan. 1, 2012, through all tax periods
ending on Dec. 31, 2016. Further provides that the program shall become null and void on
Jan. 1, 2017.
Present law provides that any person who willfully makes a false or fraudulent application,
claim, report, return, statement, invoice, or other instrument or who willfully provides any HLS 11RS-822 ORIGINAL
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false or fraudulent information, any person who willfully aids or abets another in making
such false or fraudulent application, claim, report, return, statement, invoice, or other
instrument, or any person who willfully aids or abets another in providing any false or
fraudulent information, shall be guilty, upon conviction, of a felony and shall be punished
by the imposition of a fine of not less than $1,000 and not more than $50,000 or imprisoned
for not less than two years and not more than five years, or both.
Present law further provides that any person convicted of a violation of present law shall be
liable for the repayment of all credits which were granted to that person. Further provides
that interest shall be due at the rate of 15% per annum.
Proposed law retains present law but deletes the provision authorizing the collection of
interest on the repayment of credits at 15% per annum.
Proposed law adds that at any time within the two tax years after the last tax year in which
credits are issued with respect to a business, if the business is no longer domiciled in La., the
business and its owners shall repay the total amount of angel investor tax credits issued to
the business, and investment in the business shall no longer be eligible for credits.
Proposed law provides that at any time within the three tax years after the year of
investment, if the investment is repaid or used for any other unauthorized use as determined
by the department, credits issued with respect to the business shall be subject to recapture
or repayment by the business or investor, or both, as determined by the department and the
Dept. of Revenue, and investment in the business shall no longer be eligible for credits.
Proposed law provides that credits granted but later disallowed in whole or in part, or subject
to recapture or repayme nt, may be recovered by the Dept. of Revenue from the taxpayer
applicant through any collection remedy authorized by present law and initiated within three
years from Dec. 31st of the year in which the credit was originally granted. Interest may be
assessed and collected on recovered credits, but the rate shall be limited to three percentage
points above the rate provided for in present law, computed from the original due date of the
return on which the disallowed credit was taken.
Effective Jan. 1, 2012.
(Amends R.S. 47:6020.1(A), (B)(2)(a) and (c), and (C)(1)(intro. para.), 6020.2(A)(1) and
(2)(a), (b), and (c), and 6020.3; Adds R.S. 47:6020.1(D))