HLS 15RS-1264 ORIGINAL
2015 Regular Session
HOUSE BILL NO. 724
BY REPRESENTATIVE HUNTER
TAX CREDITS: Reduces certain income and corporation franchise tax credits
1 AN ACT
2To amend and reenact R.S. 25:1226.4(C)(1) and (2) and R.S. 47:34(B)(1), 35(C), 37(C),
3 227, 265, 287.664, 6035(C)(1), 6036(C)(1)(b) and (I)(2)(a)(i), and
4 6037(B)(1)(Introductory Paragraph) and (2)(b), (c), and (d), relative to income and
5 corporate franchise tax credits; to reduce the amount of certain tax credits; to provide
6 for an effective date; and to provide for related matters.
7Be it enacted by the Legislature of Louisiana:
8 Section 1. R.S. 25:1226.4(C)(1) and (2) are hereby amended and reenacted to read
9as follows:
10 §1226.4. Tax exemptions and credits
11 * * *
12 C.(1) Whenever the governor finds that a concern satisfies the requirements
13 of this Part and the criteria established by rule, he shall advise the commerce board
14 that it may enter into a contract with such cottage industry for a tax credit of up to
15 one thousand five hundred one thousand two hundred dollars which that may be used
16 against the tax liability for state income and corporation franchise taxes related to the
17 operations of the cottage industry within the development zone.
18 (2) In addition to those tax credits provided for in Paragraph (1) of this
19 Subsection, the board may also enter into contracts with eligible cottage industries
20 for a one thousand five hundred one thousand two hundred dollar tax credit per new
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1 employee hired during the taxable year for which the credit is claimed. In order to
2 qualify for this credit, the applicant must have net new hires of one full-time
3 employee or two part-time employees. A full-time employee is a person employed
4 for at least thirty-two hours per week. A part-time employee is a person employed
5 for at least twenty hours per week. In order to qualify as a new hire for purposes of
6 this credit, the employee must have been a resident of the heritage area development
7 zone for at least thirty days prior to employment. The credit may be applied to any
8 state income tax liability or any state corporate franchise tax liability, but not
9 liabilities for penalty or interest due or outstanding at the time the credit is generated.
10 This credit shall be applicable only to a position that did not previously exist in the
11 business and that is filled by a resident of the development zone who is performing
12 duties in connection with the operation of the business as a regular, full-time
13 employee.
14 Section 2. R.S. 47:34(B)(1), 35(C), 37(C), 227, 265, 287.664, 6035(C)(1),
156036(C)(1)(b) and (I)(2)(a)(i), and 6037(B)(1)(Introductory Paragraph) and (2)(b), (c), and
16(d) are hereby amended and reenacted to read as follows:
17 §34. Corporation tax credit
18 * * *
19 B.(1) The credit shall be a portion of the state corporate income tax, but not
20 in excess of fifty forty percent of such tax. Such portion shall be an amount
21 determined by multiplying the number of new employees, as defined in Subsection
22 C of this Section, by the following amounts:
23 (a) one hundred eighty dollars per eligible new employee per taxable year.
24 (b) two hundred one hundred sixty dollars per eligible new economically
25 disadvantaged employee per taxable year.
26 (c) two hundred twenty-five one hundred eighty dollars per new employee
27 who is a resident of a neighborhood with an unemployment rate of ten percent or
28 more per taxable year.
29 * * *
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1 §35. Neighborhood assistance tax credit
2 * * *
3 C. The division of administration shall grant a tax credit against the state
4 corporate income tax liability. A tax credit of up to seventy fifty-six percent of the
5 actual amount contributed may be allowed for investment in programs approved by
6 the commissioner of administration. Such credit for any corporation shall not exceed
7 two hundred fifty two hundred thousand dollars annually. No tax credit shall be
8 granted to any bank, bank and trust company, insurance company, trust company,
9 national bank, savings association, or building and loan association for activities that
10 are a part of its normal course of business. Any tax credit not used in the period the
11 investment was made may be carried over for the next five succeeding taxable
12 periods until the full credit has been allowed.
13 * * *
14 §37. Tax credit for contributions to educational institutions
15 * * *
16 C. There shall be allowed a credit against the tax liability due under the
17 income tax for donations, contributions, or sales below cost of tangible movable
18 property made to educational institutions in the state of Louisiana. The credit
19 allowed by this Section shall be computed at the rate of forty thirty-two percent of
20 such property's value, as defined herein, or, in the case of a sale below cost, forty
21 thirty-two percent of the difference between the price received for the tangible
22 movable property by the taxpayer and the value of the property as defined herein.
23 The credit shall be limited to the total of the tax liability for the taxable year for
24 which it is being claimed and shall be in lieu of the deductions from gross income
25 provided for in R.S. 47:57. The credit shall not be allowed if the taxpayer arbitrarily,
26 capriciously, or unreasonably discriminates against any person because of race,
27 religion, ideas, beliefs, or affiliations.
28 * * *
29 §227. Offset against tax
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1 Every insurance company shall be entitled to an offset against any tax
2 incurred under this Chapter, in the amount of eighty percent of any taxes, based on
3 premiums, paid by it during the preceding twelve months, by virtue of any law of
4 this state.
5 * * *
6 §265. Credits arising from refunds by utilities
7 Whenever a utility refunds to its customers, pursuant to an order of a court
8 or regulatory agency as a result of the denial of a proposed rate increase, an amount
9 or amounts which, if taken as a deduction from gross income in the year paid or
10 accrued, would result in a net loss, then in lieu of such deduction the utility may elect
11 to take a credit against its Louisiana income tax in the amount of eighty percent of
12 the income tax increase which was the sole result of the inclusion of the amount or
13 amounts refunded in gross income in the year or years received irrespective of
14 whether or not the period of limitation provided in R.S. 47:1623 has expired for the
15 year in which the amount refunded was included in gross income. If this credit
16 exceeds the income tax that would be due the State of Louisiana in the year of the
17 refund, computed without the credit, then the excess of this credit may be carried
18 over the following two taxable years.
19 * * *
20 §287.664. Credits arising from refunds by utilities
21 Whenever a utility refunds to its customers, pursuant to an order of a court
22 or regulatory agency as a result of the denial of a proposed rate increase, an amount
23 or amounts which, if taken as a deduction from gross income in the year paid or
24 accrued, would result in a net loss, then in lieu of such deduction the utility may elect
25 to take a credit against its Louisiana income tax in the amount of eighty percent of
26 the income tax increase which was the sole result of the inclusion of the amount or
27 amounts refunded in gross income in the year or years received irrespective of
28 whether or not the period of limitation provided in R.S. 47:1623 has expired for the
29 year in which the amount refunded was included in gross income. If this credit
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1 exceeds the income tax that would be due the state of Louisiana in the year of the
2 refund, computed without the credit, then the excess of this credit may be carried
3 over the following two taxable years.
4 * * *
5 §6035. Tax credit for conversion of vehicles to alternative fuel usage
6 * * *
7 C.(1) The credit provided for in Subsection A of this Section shall be
8 allowed against individual or corporate income tax for the taxable period in which
9 the property is purchased and installed, if applicable, and shall be equal to fifty forty
10 percent of the cost of the qualified clean-burning motor vehicle fuel property.
11 * * *
12 §6036. Ports of Louisiana tax credits
13 * * *
14 C. Investor tax credit. (1)
15 * * *
16 (b) The Investor Tax Credit provided for in this Subsection shall be granted
17 by the Department of Economic Development for a qualifying project if the
18 commissioner of administration, after approval of the Joint Legislative Committee
19 on the Budget, and the state bond commission certifies to the secretary of the
20 department that securing the project will result in a significant positive economic
21 benefit to the state. "Significant positive economic benefit" means net positive tax
22 revenue that shall be determined by taking into account direct, indirect, and induced
23 impacts of the project based on a standard economic impact methodology utilized
24 by the commissioner, and the value of the credit, and any other state tax and financial
25 incentives that are used by the department to secure the project. If the commissioner
26 with the approval of the committee so certifies, then the Department of Economic
27 Development may grant a tax credit equal to eighty percent of the total capital costs
28 of such qualifying project to be taken at five percent per tax year or shall grant such
29 other amount of tax credit to be taken at such other percentage which is warranted
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1 by the significant positive economic benefit determined by the commissioner, but no
2 tax credit granted for a qualifying project shall exceed two million five hundred
3 thousand two million dollars per tax year. However, the total amount of tax credits
4 granted on a qualifying project shall not exceed the total cost of the project. In
5 addition, the investor tax credits granted by the department to any recipient pursuant
6 to this Section shall be limited to an amount which shall not result in a reduction of
7 tax liability by all recipients of such credits to exceed six million two hundred fifty
8 thousand five million dollars in any fiscal year.
9 * * *
10 I. Import-export cargo tax credit.
11 * * *
12 (2)(a)(i) For taxable years beginning on and after January 1, 2014, there shall
13 be allowed a credit against the individual income, corporation income, and
14 corporation franchise tax liability of a taxpayer who has received certification
15 pursuant to the provisions of Paragraph (1) of this Subsection; provided that the
16 credit shall be allowed only against the tax liability of the international business
17 entity which receives the certification. The amount of the credit shall be equal to the
18 product of multiplying five dollars four dollars by the taxpayer's number of tons of
19 qualified cargo for the taxable year which exceeds the pre-certification tonnage or
20 the product of multiplying the number of dollars by the taxpayer's number of tons of
21 qualified cargo for the taxable year or portion of a taxable year which exceeds the
22 pre-certification tonnage which is warranted by the significant positive economic
23 benefit determined by the commissioner pursuant to Item (ii) of this Subparagraph,
24 whichever is less. For purposes of this Item, "pre-certification tonnage" means the
25 number of tons of cargo which meets the definition of qualified cargo for purposes
26 of this credit, and which was owned by the international business entity receiving the
27 credit, were imported or exported to or from a manufacturing, fabrication, assembly,
28 distribution, processing, or warehouse facility located in Louisiana, and which were
29 so moved by way of an oceangoing vessel berthed at public port facilities in
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1 Louisiana during the 2013 calendar year. However, each tax credit granted to a
2 taxpayer shall be subject to the same limit as is provided for a qualifying project
3 pursuant to Subparagraph (C)(1)(b) of this Section. In addition, the import-export
4 cargo tax credits granted by the department to any recipient pursuant to this Section
5 shall be limited to an amount which shall not result in a reduction of tax liability by
6 all recipients of such credits to exceed six million two hundred fifty thousand five
7 million dollars in any fiscal year.
8 * * *
9 §6037. Tax credit for "green job industries"
10 * * *
11 B. Income tax credits for state-certified green projects:
12 (1) There is hereby authorized a base investment tax credit for certified,
13 verified, and approved expenditures in the state for the construction, repair, or
14 renovation of a state-certified green project, or for investments made by a company
15 or a financier in such project which are, in turn, expended for such construction,
16 repair, or renovation, not to exceed one million eight hundred thousand dollars per
17 state-certified green project. No more than five million four million dollars in tax
18 credits under this Section shall be granted for state-certified green projects per year.
19 * * *
20 (2)
21 * * *
22 (b) The base investment credit for state-certified green projects shall be for
23 the following amounts:
24 (i) If the total base investment is greater than one hundred thousand dollars
25 and less than or equal to three hundred thousand dollars, a company shall be allowed
26 a tax credit of ten eight percent of the base investment made by that company.
27 (ii) If the total base investment is greater than three hundred thousand dollars
28 and less than or equal to one million dollars, a company shall be allowed a tax credit
29 of twenty sixteen percent of the base investment made by that company.
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1 (iii) If the total base investment is greater than one million dollars, a
2 company shall be allowed a tax credit of twenty-five twenty percent of the base
3 investment made by that company.
4 (c) To the extent that base investment is expended on payroll for Louisiana
5 residents employed in connection with the construction of a state-certified green
6 project, a company shall be allowed an additional tax credit of ten eight percent of
7 the payroll; however, if the amount paid to any one person exceeds one million
8 dollars, the additional credit shall not include any amount paid to that person that
9 exceeds one million dollars.
10 (d) To the extent that base investment is expended on payroll for Louisiana
11 residents employed in connection with a state-certified green project, who are
12 graduates of an institution within the Louisiana Community and Technical College
13 System or graduates of an apprenticeship program registered with the Louisiana
14 Workforce Commission, each investor shall be allowed an additional tax credit of
15 eight-tenths of one percent of such payroll.
16 * * *
17 Section 3. This Act shall become effective July 1, 2015.
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 724 Original 2015 Regular Session Hunter
Abstract: Reduces certain income and corporation franchise tax credits by 20%.
Present law (R.S. 25:1226.4) provides for an income or corporation franchise credit to be
used against the tax liability of a heritage-based cottage industry located in the Atchafalaya
Trace Heritage Area. The credit is $1,500 per business and $1,500 per new employee hired.
Proposed law retains present law but reduces the amount of the credits from $1,500 to
$1,200 per business and from $1,500 to $1,200 per new employee hired.
Present law (R.S. 47:34) provides for an income tax credit to be used against the tax liability
of corporate income taxpayers who generate new full-time and part-time jobs in the state.
This tax credit is allowed in lieu of any tax exemptions granted pursuant to the Louisiana
Enterprise Zone Act, any ad valorem property tax exemptions for business or industry, or
any ad valorem tax exemption allowed through the State Board of Commerce and Industry
pursuant to La. Const. Art. VII, Sec. 21(F). The credit is a portion of the state corporate
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HB NO. 724
income tax not to exceed 50% and is determined by the number of new employees
multiplied by varying amounts.
Proposed law retains present law but reduces the portion of the tax that the credit is not to
exceed from 50% to 40% and reduces the eligible amount per employee as follows:
(1)From $100 to $80 per eligible new employee per taxable year.
(2)From $200 to $160 per eligible new economically disadvantaged employee per
taxable year.
(3)From $250 to $180 per new employee who is a resident of a neighborhood with an
employment rate of ten percent or more per taxable year.
Present law (R.S. 47:35) provides for an income tax credit against the state corporate income
tax liability for any business firm engaged in certain activities of providing neighborhood
assistance, job training, education for individuals, community services, or crime prevention
in the state. Present law requires the business firm to submit a proposal with certain
information relative to the project for approval by the commissioner of administration. A
tax credit of up to 70% of the actual amount contributed is authorized, but the tax credit for
any corporation shall not exceed $250,000 annually.
Proposed law retains present law but reduces the amount of the credit from 70% to 56% and
reduces the maximum credit amount from $250,000 to $200,000.
Present law (R.S. 47:37) provides for an income tax credit against a taxpayer's tax liability
for contributions, donations, or selling below cost tangible movable property to a public
educational institution for the purposes of research, research training, or direct education of
students in the state. The credit allowed is 40% of the property's value, or in the case of sale
below cost, 40% of the difference between the price received and the value of the property.
Proposed law retains present law but reduces the allowable credit from 40% to 32% of either
the property value or the difference between the price received and the value of the property.
Present law (R.S. 47:227) provides for an offset for every insurance company against any
tax incurred for taxes on premiums.
Proposed law retains present law but reduces the amount of the offset from 100% of any tax
incurred to 80% of the taxes incurred on premiums.
Present law (R.S. 47:265 and 287.664) provides for an income tax credit for utility
companies against Louisiana income tax for amounts the utility company may have refunded
to a customer pursuant to an order of the court or regulatory agency as a result of the denial
of a proposed rate increase. The credit may be taken in lieu of a deduction from gross
income if the deduction would result in a net loss. The credit is equal to the amount of the
income tax increase had the amounts refunded been included in the gross income.
Proposed law retains present law but reduces the amount of the credit from 100% of the
amount of the income tax increase to 80% of the income tax increase.
Present law (R.S. 47:6035) 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 is equal to 50% of the cost of the qualified clean-burning motor vehicle fuel
property.
Proposed law retains present law but reduces the amount of the credit from 50% to 40%.
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Present law (R.S. 47:6036) 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 dollars 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 investor tax credit is equal to the total amount of capital costs of the project
which shall be taken at 5% per tax year. The amount of the import-export cargo tax credit
is equal to the product of multiplying $5 by the taxpayer's number of tons of qualified cargo
for the taxable year that exceeds the precertification tonnage.
Proposed law retains present law but reduces the amount of the investor tax credit from the
total amount of capital costs of the project to 80% of the amount of capital costs of the
project. Further reduces the amount of the import-export cargo tax credit from $5 multiplied
by the taxpayer's number of tons of qualified cargo to $4 multiplied by the taxpayer's number
of tons of qualified cargo.
Present law (R.S. 47:6037) provides an individual income or corporate income tax credit for
approved expenditures in the state for the construction, repair, or renovation of a state-
certified green project. Present law further provides a $1M per project cap and a $5M
annual program cap. The amount of the credit allowed varies.
Proposed law retains present law and reduces the project cap from $1M to $800,000 and
reduces the annual program cap from $5M to $4M.
Present law provides for an additional tax credit of 10% of the base investment expended on
payroll for La. residents employed in connection with the construction of a state-certified
green project. The additional 10% tax credit for payroll for La. residents does not apply to
that amount in excess of $1M in payroll made to a single La. resident. Further allows an
additional 1% of the base investment expended on payroll for La. residents who are
graduates of certain La. programs.
Proposed law retains present law but reduces the amount of the credit as follows:
(1)From 10% to 8% of the investor's base investment if the total base investment is
greater than $100,000 and less than or equal to $300,000.
(2)From 20% to 16% of the investor's base investment if the total base investment is
greater than $300,000 and less than or equal to $1M.
(3)From 25% to 20% of the investor's base investment if the total base investment is
greater than $1M.
Proposed law further reduces the additional credit for payroll of La. residents from 10% to
8% and reduces the additional credit for payroll for La. residents who are graduates from
certain La. programs from 1% to 0.8%.
Effective July 1, 2015.
(Amends R.S. 25:1226.4(C)(1) and (2) and R.S. 47:34(B)(1), 35(C), 37(C), 227, 265,
287.664, 6035(C)(1), 6036(C)(1)(b) and (I)(2)(a)(i), and 6037(B)(1)(Intro. Para.) and (2)(b),
(c), and (d))
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