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Regular Session, 2011 ENROLLED
SENATE BILL NO. 135
BY SENATOR CLAITOR
AN ACT1
To amend and reenact R.S. 47:6015 and to enact R.S. 47:6038 and R.S. 51:2306, relative to2
tax credits; to make changes in the calculation and administration of the research and3
development tax credit; to provide for a limitation on the receipt of other tax benefits4
and incentives; to require reports by the secretary of the Department of Economic5
Development; and to provide for related matters.6
Be it enacted by the Legislature of Louisiana:7
Section 1. R.S. 47:6015 is hereby amended and reenacted and R.S. 47:6038 is hereby8
enacted to read as follows: 9
§6015. Research and development tax credit 10
A. The Legislature of Louisiana hereby finds and declares that the health,11
safety, and welfare of the people of this state are dependent upon the continued12
encouragement, development, growth, and expansion of the private sector within the13
state. Therefore, it is declared to be the purpose of this Section to encourage new and14
continuing efforts to conduct research and development activities within this state.15
B.(1) Any taxpayer who employs more than fifty Louisiana residents persons16
and claims for the taxable year a federal income tax credit under 26 U.S.C. §41(a)17
for increasing research activities shall be allowed a refundable tax credit to be18
applied against income and corporation franchise taxes due.19
(2) Any taxpayer who employs up to fifty Louisiana residents persons and20
incurs qualified research expenses as defined in 26 U.S.C.§41(b), for the taxable21
year, shall be allowed a refundable tax credit to be applied against income and22
corporation franchise taxes due.23
(3) Each taxpayer seeking the credits authorized in this Section shall apply24
ACT No. 407 SB NO. 135 ENROLLED
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to the Department of Economic Development for the credits .The taxpayer shall1
remit an application fee of two hundred fifty dollars with the application. The2
application shall include all of the following:3
(a) In cases where the taxpayer employs more than fifty Louisiana residents4
persons, a federal income tax return and supporting documentation that shows the5
amount of the federal research credit for the same taxable year. The supporting6
documentation for a taxpayer who employs up to fifty Louisiana residents persons7
shall show the amount of the qualified research expenses for the same taxable year.8
If claiming the credit under Subsection D of this Section, the taxpayer shall also9
remit supporting documentation for the federal Small Business Innovation Research10
Grant.11
(b) The total amount of qualified research expenses and the qualified research12
expenses in this state.13
(c) The total number of Louisiana residents employed persons employed in14
Louisiana by the taxpayer and the number of those Louisiana residents persons15
employed in Louisiana directly engaged in research and development.16
(d) The average wages of the Louisiana resident employees persons17
employed in Louisiana not directly engaged in research and development and the18
average wages of the Louisiana resident employees persons employed in Louisiana19
directly engaged in research and development.20
(e) The average value of benefits received by all Louisiana resident21
employees persons employed in Louisiana.22
(f) The cost of health insurance coverage offered to all Louisiana resident23
employees persons employed in Louisiana.24
(g) Any other information required by the Department of Economic25
Development.26
(4) The Department of Economic Development shall approve or disapprove27
each application. No credits shall be granted to a taxpayer under this Section unless28
the credit is approved by the Department of Economic Development.29
C.(1) For purposes of determining the amount of the credit earned, an30 SB NO. 135 ENROLLED
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"entity" shall be determined by the total number of employees based on the1
aggregate of all affiliated companies.2
(2) The amount of the credit authorized in this Section shall be equal to3
either:4
(a) Eight percent of the state's apportioned share of the taxpayer's5
expenditures for increasing research activities difference, if any, of the Louisiana6
qualified research expenses for the taxable year minus the base amount, if the7
taxpayer is an entity that employs one hundred or more Louisiana residents persons.8
(b) Twenty percent of the state's apportioned share of the taxpayer's9
expenditures for increasing research activities difference, if any, of the Louisiana10
qualified research expenses for the taxable year minus the base amount, if the11
taxpayer is an entity that employs fifty to ninety-nine Louisiana residents persons.12
(c) Twenty-five percent of the state's apportioned share of the federal13
research credit claimed for research expenditures in the state if the taxpayer claims14
the alternative incremental tax credit under 26 U.S.C. §41.15
(d) Forty percent of the state's apportioned share of the taxpayer's Louisiana16
qualified research expenses for the taxable year, conducted in this state if the17
taxpayer is an entity that employs fewer than fifty Louisiana residents persons.18
(2) The state's apportioned share of a taxpayer's expenditures for increasing19
research activities shall be the excess of the taxpayer's qualified research expenses20
for the taxable year over the base amount, as determined under 26 U.S.C. §41,21
multiplied by a percentage equal to the ratio of the qualified research expenses in this22
state for the taxable year to the taxpayer's total qualified research expenses for the23
taxable year.24
(3)(a) All entities taxed as corporations for Louisiana income or corporation25
franchise tax purposes shall claim any credit allowed under this Section on their26
corporation income and corporation franchise tax return.27
(b) Individuals shall claim any credit allowed under this Section on their28
individual income tax return.29
(c) Estates or trusts shall claim any credit allowed under this Section on their30 SB NO. 135 ENROLLED
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fiduciary income tax returns.1
(d) Entities not taxed as corporations shall claim any credit allowed under this2
Section on the returns of the partners or members as follows:3
(i) Corporate partners or members shall claim their share of the credit on their4
corporation income or corporation franchise tax returns.5
(ii) Individual partners or members shall claim their share of the credit on6
their individual income tax returns.7
(iii) Partners or members that are estates or trusts shall claim their share of8
the credit on their fiduciary income tax returns.9
D. A taxpayer who receives a federal Small Business Innovation Research10
Grant as created by the Small Business Innovation Development Act of 1982 (P.L.11
97-219), reauthorized by the Small Business Research and Development12
Enhancement Act (P.L. 102-564), and reauthorized again by the Small Business13
Reauthorization Act of 2000 (P.L. 106-554), shall be allowed a refundable tax credit14
in an amount equal to forty percent of the award received during the tax year.15
E. As used in this Section, the following terms shall have the meaning16
hereafter ascribed to them, unless the context clearly indicates otherwise:17
(1) "Department" shall mean the Department of Economic Development.18
(2) "Base amount" shall mean seventy percent of the average annual19
qualified research expenses within Louisiana during the three years preceding20
the taxable year.21
(2) (3) The terms "base amounts", "qualified research expenses", and22
"qualified research" shall have the same meanings as those terms are defined in 2623
U.S.C. §41, as amended.24
(4) "Person" shall mean a natural person.25
F. The department shall administer the provisions of this Section and shall26
have the following powers and duties in addition to those granted by other laws of27
this state:28
(1) To monitor the implementation and operation of this Section and conduct29
a continuing evaluation of the program.30 SB NO. 135 ENROLLED
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(2) To assist any taxpayer in obtaining the benefits of any incentive or1
inducement program authorized by Louisiana law.2
(3) To promulgate program rules and regulations regarding the sale of tax3
credits allowed by this Section, in consultation with the secretary of the Department4
of Revenue, in accordance with the Administrative Procedure Act.5
(4) To receive information from the Department of Revenue regarding the6
identity of the taxpayer and the amount of credit claimed for any credits claimed7
pursuant to this Section. Such information shall not be public record and shall be8
subject to the same prohibition of disclosure as in the possession of the Department9
of Revenue.10
(5) To audit all relevant records and accounts of any taxpayer applying11
for credits provided for by this Section.12
G.(1) Recovery of credits by Department of Revenue. Credits granted under13
this Section, but later disallowed in whole or in part, may be recovered by the14
secretary of the Department of Revenue from the taxpayer applicant through any15
collection remedy authorized by R.S. 47:1561 that is initiated within three years from16
December thirty-first of the year in which the credit was originally granted. The only17
interest that may be assessed and collected on these recovered credits is interest at18
a rate three percentage points above the rate provided in R.S. 9:3500(B)(1), which19
shall be computed from the original due date of the return on which the disallowed20
credit was taken.21
(2) The provisions of this Subsection are in addition to and shall not limit the22
authority of the secretary of the Department of Revenue to assess or to collect under23
any other provision of law. This includes the disallowance of any disallowed credit24
claimed by a taxpayer who received the credit through purchase or through a25
distribution by an entity not taxed as a corporation.26
H. A taxpayer shall not receive any other incentive administered by the27
Department of Economic Development for any expenditures for which the28
taxpayer has received a credit pursuant to this Section.29
I. No credit shall be allowed pursuant to this Section for research30 SB NO. 135 ENROLLED
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expenditures incurred or Small Business Innovation Research Grant funds received1
after December 31, 2013 December 31, 2019.2
* * *3
§6038. Reports; tax incentives administered by the Department of Economic4
Development5
Notwithstanding any provision of law to the contrary, the secretary of6
the Department of Economic Development shall report to the Joint Legislative7
Committee on the Budget information concerning the granting and denial of tax8
credits and rebates, hereinafter referred to as "tax incentives", administered by9
the department authorized under this Chapter. On January 30
th
of each year,10
the secretary shall transmit to the members of the committee a list of the11
recipients of each tax incentive, as well as a list of applicants denied tax12
incentives, over the most recently concluded calendar year. The report shall13
contain the name and primary place of business of each applicant.14
Section 2. R.S. 51:2306 is hereby enacted to react as follows: 15
§2306. Reports; tax incentives administered by the Department of Economic16
Development17
Notwithstanding any provision of law to the contrary, the secretary of18
the Department of Economic Development shall report to the Joint Legislative19
Committee on the Budget information concerning the granting and denial of tax20
credits and rebates, hereinafter referred to as "tax incentives", administered by21
the department authorized under this Title. On January 30
th
of each year, the22
secretary shall transmit to the members of the committee a list of the recipients23
of each tax incentive, as well as a list of applicants denied tax incentives, over24
the most recently concluded calendar year. The report shall contain the name25
and primary place of business of each applicant.26
Section 3. The provisions of this Act shall be applicable to tax years beginning on27
and after January 1, 2011. However, any refundable research and development tax credits28
earned and granted prior to the effective date of this Act shall continue to be valid, effective,29
and transferable according to the terms of the original grant.30 SB NO. 135 ENROLLED
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Section 4. This Act shall become effective upon signature by the governor or, if not1
signed by the governor, upon expiration of the time for bills to become law without signature2
by the governor, as provided by Article III, Section 18 of the Constitution of Louisiana. If3
vetoed by the governor and subsequently approved by the legislature, this Act shall become4
effective on the day following such approval.5
PRESIDENT OF THE SENATE
SPEAKER OF THE HOUSE OF REPRESENTATIVES
GOVERNOR OF THE STATE OF LOUISIANA
APPROVED: