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)]
HB 664 Reengrossed 2015 Regular Session Stokes
Abstract: Defines inventory for purposes of the inventory tax credit and authorizes the secretary
of Dept. of Revenue to intervene in certain proceedings.
Present law authorizes an income or corporation franchise tax for ad valorem tax paid to political
subdivisions on inventory held by manufacturers, distributors, and retailers and on certain natural
gas. The amount of the tax is equal to 100% of taxes paid.
Proposed law defines "inventory" for the purpose of the credit to include certain items of tangible
personal property that are being held for sale in the ordinary course of business, are in the process
of production for subsequent sale, or are to become a part of the production of the good for sale.
Proposed law excludes from the definition of "inventory" certain oil that is stored in tanks, items that
would be considered inventory following the initial lease of the item by the taxpayer, items for which
depreciation has commenced for the purposes of a taxpayer's federal tax return, items that are subject
to use by the taxpayer for longer than 18 months, and items otherwise exempt from ad valorem
taxation pursuant to the La. Constitution.
Proposed law authorizes the secretary to intervene in any proceeding related to the valuation or
classification of property as inventory for which a credit will be claimed pursuant to present law
when there is a finding of overvaluation or misclassification of inventory in certain circumstances.
Effective Jan. 1, 2016, and for all tax years thereafter.
(Amends R.S. 47:6006(C); Adds R.S. 47:6006(E))
Summary of Amendments Adopted by House
The Committee Amendments Proposed by House Committee on Ways and Means to the original
bill:
1. Delete provisions of proposed law that changed the amount of inventory tax credit.
2. Specify that tangible property has to be held "exclusively" for sale in the ordinary course
of business for the purposes of qualifying as "inventory".
3. Delete provision of proposed law that authorized the secretary to require a taxpayer to file it's rendition of inventory with the parish assessor when there has been a finding of
overvaluation or misclassification of inventory for purposes of the inventory tax credit.
The House Floor Amendments to the engrossed bill:
1. With respect to items excluded from the definition of "inventory", add the qualification
that items that would be considered inventory following the initial lease of the item be
items leased by the taxpayer.
2. With respect to items excluded from the definition of "inventory", change the limitation
from an intervening or incidental use of an item by the taxpayer to any use by the
taxpayer for longer than 18 months.