Request the Department of Revenue to develop and encourage "master limited partnerships" investments within the state of Louisiana.
The adoption of this resolution could lead to significant changes in how MLPs are treated under Louisiana state tax law. By aligning Louisiana's policies with more than thirty other states that exclude MLPs from withholding requirements, it could enhance the attractiveness of Louisiana for investment in the natural resources sector. This move is aligned with national recognition of MLPs as a unique business model capable of raising substantial capital for energy resource development, thereby promoting local economic growth. Furthermore, the outcome may help Louisiana capitalise more effectively on its energy resources.
Senate Resolution 180, proposed by Senator Morrell, aims to encourage and support the use of master limited partnerships (MLPs) in Louisiana. The resolution requests the Department of Revenue to reconsider its stance on denying tax exemptions related to composite returns and withholding requirements for MLPs. By urging the department to study Louisiana's revenue laws and engage with the MLP community, the bill endeavors to foster investment in capital-intensive businesses such as oil and gas production and mining, which are vital to the state's economy.
The general sentiment surrounding SR180 appears to be supportive among the energy sector stakeholders who view MLPs favorably due to their potential to generate significant revenue and investment. Those in favor believe that facilitating MLP investments would create a positive business environment and stimulate job creation in Louisiana. However, there might be reservations from fiscal conservatives concerned about any potential revenue implications of granting such tax exemptions.
Notably, the resolution addresses the recent changes in Louisiana’s tax stance on MLPs, indicating a departure from a long-standing exemption policy. This contention highlights the ongoing dialogue regarding the balance between fostering business investment and maintaining state revenue levels. Some may argue for caution regarding the effects of tax exemptions on public revenue, while others advocate for the economic benefits that increased MLP activity could yield for the state.