Establishes the Corporate Tax Apportionment Program for the granting of contracts for certain businesses to utilize the single sales factor to compute their taxable for income tax purposes and their taxable capital for franchise tax purposes. (7/1/12) (EG DECREASE GF RV See Note)
The impact of SB463 on state laws is significant as it alters how businesses compute taxable income and capital, notably simplifying the tax calculation process for qualified entities. The program applies to businesses that derive at least 50% of their sales from out-of-state customers or from federal contracts, providing a clear incentive for firms that meet these criteria. However, it specifically excludes businesses primarily involved in retail sales, real estate, financial services, or gaming, unless they create a minimum number of qualifying jobs. This exclusion is noteworthy as it streamlines eligibility for businesses more likely to contribute to state economic goals.
Senate Bill 463 establishes the Corporate Tax Apportionment Program in Louisiana, which allows certain businesses to utilize the single sales factor methodology for computing their corporate income and franchise taxes. This program is designed to encourage businesses to locate or expand in Louisiana, providing tax benefits contingent on creating new jobs, particularly 'headquarter jobs' or 'shared service center jobs'. It aims to make Louisiana a more attractive location for businesses by fostering economic development and job creation.
The sentiment around SB463 appears mixed, reflecting a broader debate on taxation and economic development priorities in Louisiana. Proponents advocate the bill as a vital tool for attracting businesses and generating employment, framing it as a necessary measure to compete with other states that offer similar tax incentives. Conversely, critics raise concerns about the exclusions and the potential prioritization of corporate benefits over local community needs. They argue that the targeted approach may exclude deserving businesses that could also promote economic growth.
One notable point of contention regarding SB463 is its potential to favor large corporations at the expense of local businesses that do not meet the stringent requirements for participation. The strict eligibility conditions, which favor specific sectors while excluding others, have sparked a discussion on the fairness of tax policy and the need for a more inclusive approach that supports a diverse range of businesses. The bill's expiration of new contracts after July 1, 2017, adds another layer of complexity, raising questions about its long-term viability and the consequences for businesses that may have relied on these incentives.