Provides for tax credit against corporate income and franchise taxes based on the increase in visitors resulting from certain activities undertaken by businesses seeking the credit. (8/1/13) (OR DECREASE GF RV See Note)
Impact
The implementation of SB163 will facilitate contracts between the Department of Economic Development and participating businesses, where the incentive payments are based on the actual increase in visitors certified by the department. This could lead to significant increases in state revenue generated from tourism, potentially benefiting local businesses in hospitality, retail, and other sectors tied to tourism. The excess of allowable credits above tax liabilities would be refunded, allowing businesses to benefit even if the credit exceeds their tax obligations, thereby providing financial relief and encouraging business growth.
Summary
Senate Bill 163 proposes to establish a Tourism-based Economic Development Program in Louisiana, which aims to incentivize businesses to incrementally increase the number of visitors to the state. The bill reflects the legislature's recognition of tourism as a key economic driver that generates tax revenue and creates jobs. By offering a tax credit against corporate income and franchise taxes, it seeks to encourage businesses to adopt strategies that can attract at least 100,000 additional visitors annually.
Sentiment
The sentiment surrounding SB163 appears to be generally positive among supporters who emphasize the need for economic growth and job creation through tourism. However, there may be some concern from those who are wary of the potential for misuse of tax incentives and the long-term impact on state tax revenues. The bill has the potential to foster collaboration between the government and businesses, enhancing the overall economic landscape, yet it must be monitored for effective implementation and tangible results.
Contention
Despite the positive intentions behind SB163, potential points of contention may arise regarding the effectiveness of tax credits as a strategy for economic development. Critics might argue that without adequate oversight, the initiative could lead to revenue losses if businesses do not deliver on their visitor increase commitments. Furthermore, there may be debates concerning the equitable distribution of benefits, particularly whether the program effectively supports smaller businesses that may not have the capacity to generate large increases in visitors.
Levies a flat corporate income tax, repeals the corporation franchise tax, repeals deductibility of federal income taxes paid, and terminates certain income tax credits (OR DECREASE GF RV See Note)
Provides a flat corporation income tax rate and eliminates the usage of certain tax credits against corporation income tax. (gov sig) (OR -$144,000,000 GF RV See Note)
Reduces the amount of certain tax credits beginning January 1, 2014, for income tax credits and January 1, 2015, for corporate franchise credits (RE INCREASE GF RV See Note)