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)]
Broadwater HB No. 465
Abstract: Requires certain action by the legislature regarding ad valorem tax on shares of bank
stock if the corporation income tax is repealed.
Present law provides that shares of stock of all banks, banking companies, firms, associations, or
corporations, doing a banking business in this state, chartered by the laws of this state, any other
state, or of the U.S. or chartered under the laws of another country (bank stock) are subject to ad
valorem tax. The tax rate is 15% of fair market value. The value is based on stockholder equity
capital.
Proposed law retains present law and provides for legislative findings regarding the ad valorem
taxation of bank shares in lieu of a bank paying corporation income tax.
Proposed law provides that if the corporation income tax is repealed, the La. Legislature is
required to provide a commensurate level of tax relief to banks paying ad valorem tax under
present law, while also identifying a revenue source to meet the obligations of local governments
to provide necessary services.
Proposed law provides that no action taken by the La. Legislature to comply with the provisions
of proposed law may result in banks being subject to any new tax, fee, or charge that is not
applicable to other corporations in the state.
(Adds R.S. 47:1967(H))
Summary of Amendments Adopted by House
Committee Amendments Proposed by House Committee on Ways and Means to the original
bill.
1. Deleted requirements that if the corporation income tax is repealed, the state would
either incur specific obligations relative to the ad valorem tax on bank stock, or the ad
valorem tax on bank stock would be repealed.
2. Added a requirement that the La. Legislature provide a commensurate level of tax
relief to banks relative to ad valorem tax as is afforded to other businesses if the
corporation income tax is repealed. House Floor Amendments to the engrossed bill.
1. With respect to prospective actions of the legislature if the corporation income tax is
repealed, specifically regarding the balancing of ad valorem tax relief for banks with
consideration of the obligations of local government to provide services, specified
that the legislature shall identify a revenue source for local government in such case.