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)]
Richard HB No. 689
Abstract: Reduces the tax levied on the net income of individuals and repeals certain income
tax deductions, exemptions, and credits.
Present law provides for a tax to be assessed, levied, collected, and paid upon the taxable
income of an individual to be computed as follows:
(1)2% on that portion of the first $12,500 of net income;
(2)4% on the next $37,500 of net income;
(3)6% on any amount of net income in excess of $50,000.
Proposed law reduces the present law rates of the tax on the net income of individuals as follows:
(1)1.25% on the first $12,500 of net income.
(2)2.5% on the next $37,500 of net income.
(3)3.75% on any amount of net income in excess of $50,000.
Present law provides that in the case of joint returns, the combined tax of present law shall be
doubled.
Proposed law retains present law.
Present law provides for an income tax credit as an incentive for an individual to donate or sell
below cost, tangible movable property to public educational institutions for purposes of research,
research training, or the direct education of students.
Proposed law retains present law but deletes applicability of the credit to individual income tax.
Present law provides for an income tax deduction for construction code retrofitting, excess
federal itemized personal deductions, and recreation volunteer and volunteer firefighter
deductions.
Proposed law repeals present law. Present law provides that purposes of computing the individual income tax, the term "tax table
income" for resident individuals, shall mean adjusted gross income plus interest on certain
obligations of a state or political subdivision, less items such as gratuitous loans, federal income
tax liability, excess personal exemptions, amounts deposited into medical savings accounts,
amounts deposited into educational savings accounts, certain exclusions for S Bank shareholders,
certain expenses disallowed by federal law in computing net income, the temporary teacher
deduction, excess federal itemized deductions, elementary and secondary school tuition
deductions, certain education expenses for home-schooled children, deduction of fees and other
educational expenses for a quality public education, income from net capital gains, interest on
certain obligations, certain income distributed from trusts, and certain income for individuals on
active duty as a member of the armed forces of the U.S.
Proposed law repeals present law.
Present law provides for an income and corporation franchise tax credit for the employment of
each person and participant of Family Independence Work Program in a newly created full-time
job. The amount of the credit shall be $750 and shall be allowed for the taxable period during
which the new employee has completed one year of full-time service with the taxpayer or against
the corporation franchise tax for the taxable period following the taxable period during which the
new employee has completed one year of full-time service with the taxpayer.
Present law provides for an income or corporation franchise tax credit for ad valorem taxes paid
to political subdivisions on inventory held by manufacturers, distributors, and retailers and on
natural gas held, used, or consumed in providing natural gas storage services or operating natural
gas storage facilities. The amount of the credit shall be equal to 100% of the inventory taxes
paid to the political subdivision.
Present law provides for an income or corporation franchise tax credit for ad valorem taxes paid
without protest to political subdivisions on vessels in Outer Continental Shelf Lands Act Waters
as certified to the assessor within the calendar year immediately preceding the taxable year of
assessment of such vessel. The amount of the credit shall be equal to 100% of the ad valorem
taxes paid to the political subdivision.
Present law provides for an income tax credit for La. taxpayers for investment in state-certified
productions earned at the time expenditures are made by a motion picture production company in
a state-certified production.The amount of the credit shall be equal to 30% of the base
investment made by the investor if the total base investment is more than $300,000. Additionally
provides for a credit equal to 5% of base investment expended on payroll for La. residents
employed in connection with a state-certified production. However, this credit does not apply to
the payroll of any one person that exceeds $1 million.
Present law provides for an income or corporation franchise tax credit for qualified donations
made to qualified playgrounds. The amount of the credit shall be equal to the lesser of $1,000 or
one-half of the value of the cash, equipment, goods, or services donated.
Present law provides for an income or corporation franchise tax credit for a La. business or industry which supports and encourages employee basic skills training by satisfying criteria
established in present law and which submit proper and complete applications. The amount of
the credit shall equal $250 per participating employee, with the total of all basic skills training
credits not to exceed $30,000 for any single business or industry enterprise in a particular tax
year.
Present law provides for an income and corporation franchise tax credit for ad valorem taxes paid
to political subdivisions by a telephone company for the company's public service properties.
The amount of the credit shall be equal to 40% of the aggregate ad valorem taxes paid by the
telephone company to the political subdivision.
Present law provides for a refundable income and corporation franchise tax credit to encourage
new and continuing efforts to conduct research and development activities within this state. The
amount of the credit varies depending on the number of persons and claims for the taxable year
an income tax credit is authorized under current federal law. Present law further prohibits
credits for research expenditures incurred or Small Business Innovation Research Grant funds
received after Dec. 31, 2019.
Present law provides for an income or corporation franchise tax credit for the filing fee paid to
the La. State Bond Commission incurred by an economic development corporation in the
preparation and issuance of bonds. The amount of the credit shall be equal to the amount of the
filing fee paid.
Present law provides for an income or corporation franchise tax credit for certain investments in
qualified low-income communities. The amount of the credit varies depending on the amount of
the investment.
Present law provides for an income and corporate franchise tax credit for purchases of specialty
apparel items including industrial clothes, uniforms, and scrubs, from a contractor in a certified
Private Sector/Prison Industry Enhancement Program which employs inmates to manufacture
such apparel. The amount of the credit shall be equal to the state sales and use tax paid by the
purchaser on each case or other unit of apparel as reflected on the purchaser's books and records.
Present law provides for an income and corporation franchise tax credit for the expenses
incurred during the rehabilitation of a historic structure located in a downtown development or a
cultural product district. The amount of the credit shall not exceed 25% of the eligible costs and
expenses of the rehabilitation. Present law prohibits a taxpayer, or an entity affiliated with a
taxpayer, from receiving more than $5 million of credit for any number of rehabilitated structures
within a particular downtown development or cultural product district. Present law provides that
the tax credit shall be effective for the taxable years ending prior to Jan. 1, 2016.
Present law provides for an income or corporation franchise tax credit for the purpose of
encouraging investment in early stage wealth-creating businesses and to enlarge the number of
quality jobs available to retain young people educated in this state. The amount of the credit
varies based on the amount of money invested in La. Entrepreneurial Businesses. Present law provides for an income or corporation franchise tax credit for applications for state-
certified digital interactive media productions submitted to the office of entertainment industry
development in the Dept. of Economic Development. The amount of the credit shall be equal to
25% of the base investment in the state-certified digital interactive media production. Present
law provides for an additional tax credit of 10% of payroll to the extent that the investment is
expended on payroll for La. residents employed in connection with a state-certified production.
Present law provides for an income tax credit for investments made in state-certified productions
and state-certified sound recording infrastructure projects until Jan. 1, 2015. The amount of the
credit is equal to 25% of the base investment in excess of $15,000 for productions certified on or
after July 1, 2007, and for infrastructure projects which have applied for the credit on or before
Aug. 1, 2009.
Present law provides for an income tax credit for the surcharges, market equalization charges, or
assessments paid by a taxpayer as a result of the 2005 regular assessment or the emergency
assessments levied due to Hurricanes Katrina and Rita by La. Citizens Property Insurance
Corporation for the FAIR Plan and Coastal Plan. The amount of the credit is equal to the
surcharges, market equalization charges, or assessments paid by a taxpayer.
Present law provides for an income tax credit for the cost of purchase and installation of a wind
or solar energy system, or both, by a taxpayer at his La. residence, by the owner of a residential
rental apartment project, or by a taxpayer who purchases and installs a system in a residence or a
residential rental apartment project located in La. Present law limits one credit per system. The
amount of the credit shall be equal to 50% of the first $25,000 of the cost of each wind energy
system or solar energy system, including installation costs, purchased and installed on or after
Jan. 1, 2008.
Present law provides for a refundable income and corporation franchise tax credit for a resident
taxpayer engaged in the business of producing milk for sale. The amount of the credit shall be
based on the production and sale of milk below the announced production price over a calendar
year in accordance with a schedule provided in present law. Present law limits the credit allowed
for each producer to no more than $30,000 per calendar year and caps the total aggregate amount
of credits for all producers at $2.5 million per calendar year.
Present law provides for a refundable income and corporation franchise tax credit for purposes of
promoting job training in the workforce and producing a quality workforce. The amount of the
credit is equal to $1 for each hour of employment of each eligible apprentice, not to exceed 1,000
hours for each eligible apprentice.
Present law provides for an income tax credit for state-certified musical or theatrical facility
infrastructure projects. The amount of the credit shall vary depending on the amount of the
investment in such projects; however, the total amount of credits per project shall not exceed $10
million and the total amount of credits per year shall not exceed $60 million.
Present law provides for an income tax credit for qualified clean-burning motor vehicle fuel property purchased and installed on certain motor vehicles. The amount of the credit shall be
equal to 50% of the cost of the qualified clean-burning motor vehicle fuel property.
Present law provides for an income and corporate franchise tax credit for the total capital costs of
a project sponsored or undertaken by a public port and investing companies that have a capital
cost of at least $5 million and at which the predominant trade or business activity conducted will
constitute industrial, warehousing, or port and harbor operations and cargo handling, including
any port or port and harbor activity. The amount of the credit shall be equal to the total amount
of capital costs of the project which shall be taken at 5% per tax year.
Present law provides for an income and corporation franchise Import Export tax credit for any
breakbulk or containerized cargo brought to the state from a foreign country or from the state to a
foreign country. The amount of the credit shall be equal to the product of multiplying $5 by the
number of tons of qualified cargo for the taxable year but only for the
total amount provided by the secretary of the Dept. of Economic Development.
Present law provides for an income tax credit for certain expenditures for the construction, repair,
or renovation of a state-certified green project. The amount of the credit is based on the amount
of the investment.
Present law provides for a refundable income or corporation franchise tax credit for child care
providers. The amount of the credit shall be equal to an amount based upon the average monthly
number of children who either participate in the Child Care Assistance Program or who are foster
children in the custody of the Dept. of Children and Family Services, and who are attending a
child care facility or facilities operated by the child care provider, multiplied by an amount which
shall be based upon the quality rating of each child care facility operated by the child care.
Present law provides for a refundable income tax or corporation franchise tax credit for eligible
business child care expenses supported by a business. The amount of the credit shall be based on
a percentage of eligible business child care expenses depending upon the quality rating of the
child care facility to which the expenses are related or the quality rating of the child care facility
the child attends. Present law provides for an additional refundable income or corporation
franchise tax for the payment by a business of fees and grants to child care resource and referral
agencies not to exceed $5,000 per tax year.
Present law provides for an income and corporation franchise tax credit for investments which
encourage the development, growth, and expansion of the private sector within the state by
increasing access to capital in disadvantaged areas of the state. The amount of the credit is
dependent on the amount of the private sector investment made by the taxpayer. Further
provides that tax credits shall be allowed for qualified equity investments which have been
invested in qualified low-income community investments until Dec. 31, 2013.
Proposed law retains present law but deletes applicability of such credits against individual
income tax. Present law provides for an individual income tax credit for child care expenses based on the
quality rating of the child care facility which the child attends. The amount of the credit varies
depending on the quality rating of the child care facility.
Proposed law repeals present law.
Present law provides for a refundable individual income tax credit for eligible child care directors
and eligible child care staff. The amount of the credit varies based upon the qualifications of the
provider.
Proposed law repeals present law.
Effective Jan. 1, 2014.
(Amends R.S. 47:32(A), 37(A), (B)(5), (C), (D)(2), and (E), 293, 6004(A)(2)(intro. para.),
6005(C)(1), 6006(A) and (B), 6006.1(A) and (B), 6007(C)(1), 6008(A), 6009(D)(1), 6014(A),
(B), and (C), 6015(B)(1) and (2), 6016(C), (D), (E)(4), and (F)(1)(intro. para.), 6017(A), 6018(B)
and (D), 6019(A)(1)(a) and (3), 6020(D)(2)(a) and (b) and (3), 6022(E)(2)(a), 6023(C)(1),
6025(A), 6030(A) and (E), 6032(A), 6033(B)(1), (C), and (D), 6034(D), 6035(C), (F), and (G),
6036(C)(1)(a)(intro. para.) and (4) and (I)(2)(a)(i), 6037(B)(intro. para.) and (C), 6105, 6107, and
6108(B); Repeals R.S. 47:33, 43, 44, 45-51, 53-54, 56-59, 60, 60.1, 65, 68, 79, 294, 297(B)-(D)
and (F)-(P), 297.1-297.12, 6104, and 6106)