Louisiana House Bill HB508

Louisiana 2013 Regular Session

• Introduced: 4/8/13
• Refer: 4/8/13

Caption

Creates an income and corporation franchise tax credit for manufacturers, producers, and importers of medical devices for amounts paid as federal excise taxes on the sale of medical devices

Impact

If enacted, HB 508 could have a notable impact on state tax laws by allowing a complete offset of the federal excise tax burden for relevant businesses. This move is intended to promote the medical device manufacturing sector within Louisiana, potentially leading to increased local investment, job creation, and competitiveness among manufacturers. The bill also specifies that the unused portion of the tax credit can be carried forward for up to 36 months, making it a viable option for businesses that may not be able to fully utilize the credit in the year it is claimed.

Summary

House Bill 508, introduced by Representative Cromer, proposes the creation of an income and corporation franchise tax credit specifically for manufacturers, producers, and importers of medical devices in Louisiana. The credit is aimed to offset federal excise taxes that these entities pay on medical devices, which are imposed under Section 4191 of the Internal Revenue Code as part of the Affordable Care Act. The bill establishes that eligible entities can claim a tax credit equal to 100% of the federal excise tax paid, thereby providing significant financial relief to those in the medical device industry.

Sentiment

Discussion surrounding the bill appears to be favorable, particularly from stakeholders in the medical device industry who view the tax credit as a supportive measure that could alleviate financial pressure from federal taxation. Proponents argue that this incentive is essential for facilitating economic growth in the sector, especially considering the competitive challenges faced by manufacturers. However, there may be concerns among critics regarding the overall implications for state tax revenue and whether such targeted tax breaks are necessary or justified.

Contention

Key points of contention include the effectiveness of tax credits as a tool for economic development versus the potential loss of revenue for the state. Some legislators might question whether the benefits of facilitating growth in one industry can overshadow the economic hit that can result from decreased tax income. Additionally, while proponents may push for a broad application of this tax credit, critics may call for a more measured approach promoting economic equity across various industries within the state.