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 749 Engrossed 2015 Regular Session Burrell
Abstract: Requires the House Ways and Means and Senate Revenue and Fiscal Affairs committees
to review certain tax credits beginning not later than Sept. 1, 2015, and to make
recommendations to either continue or terminate credits. Repeals certain expired or inactive
tax credits.
Present law provides for the following income and corporation franchise tax credits:
(1)R.S. 47:6004 Employer Credit
(2)R.S. 47:6005 Qualified new recycling manufacturing or process equipment and/or service
contracts
(3)R.S. 47:6006 Tax credits for local inventory taxes paid
(4)R.S. 47:6006.1 Tax credits for taxes paid with respect to vessels in Outer Continental Shelf
Lands Act Waters
(5)R.S. 47:6007 Motion picture investor tax credit
(6)R.S. 47:6008 Tax credits for donations made to assist playgrounds in economically depressed
areas
(7)R.S. 47:6009 Louisiana Basic Skills Training Tax Credit
(8)R.S. 47:6010 Employer tax credit for employee alcohol and substance abuse treatment
programs
(9)R.S. 47:6012 Employer tax credits for donations of materials, equipment, advisors, or
instructors
(10)R.S. 47:6013 Tax credits for donations made to public schools
(11)R.S. 47:6014 Credit for property taxes paid by certain telephone companies; fund
(12)R.S. 47:6015 Research and development tax credit (13)R.S. 47:6016.1 Louisiana New Markets Jobs Act; premium tax credit
(14)R.S. 47:6017 Tax credits for certain expenses paid by economic development corporations
(15)R.S. 47:6018 Tax credits for purchasers from "PIE contractors"
(16)R.S. 47:6022 Digital interactive media and software tax credit
(17)R.S. 47:6023 Sound recording investor tax credit
(18)R.S. 47:6025 Tax credit for Louisiana Citizens Property Insurance Corporation assessment
(19)R.S. 47:6026 Cane River heritage tax credit
(20)R.S. 47:6028 Tax credit for certain overpayments
(21)R.S. 47:6029 Tax credit for conversion or acquisition of trailers which haul sugarcane
(22)R.S. 47:6030 Solar energy systems tax credit
(23)R.S. 47:6032 Tax credit for certain milk producers
(24)R.S. 47:6033 Apprenticeship tax credits
(25)R.S. 47:6034 Musical and theatrical production income tax credit
(26)R.S. 47:6035 Tax credit for conversion of vehicles to alternative fuel usage
(27)R.S. 47:6036 Ports of Louisiana tax credit
(28)R.S. 47:6037 Tax credit for "green job industries"
(29)R.S. 47:6104 Child care expense tax credit
(30)R.S. 47:6105 Child care provider tax credit
(31)R.S. 47:6106 Credit for child care directors and staff
(32)R.S. 47:6107 Business-supported child care
Proposed law requires the review of (1) through (7), (9) through (19), (22), (23), (25) through (32),
and repeals part of (2) and all of (8), (20), (21) and (24).
REVIEW OF TAX CREDITS IN PRESENT LAW Present law (R.S. 47:6004) 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 is $750 and is 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 (R.S. 47:6005) provides an income tax or corporation franchise tax credit for taxpayers
who purchase qualified new recycling manufacturing or process equipment or qualified service
contracts to be used or performed exclusively in the state. The amount of the credit is 20% of the
cost of the equipment or service contract less the amount of any other tax credit received for the
purchase of the equipment or contract. Further provides an annual program cap of $5M.
Present law (R.S. 47:6006) 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 is equal to 100% of the inventory taxes paid to the
political subdivision.
Present law (R.S. 47:6006.1) 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 is equal to 100% of the ad
valorem taxes paid to the political subdivision.
Present law (R.S. 47:6007) 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 is 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 dollars.
Present law (R.S. 47:6008) provides for an income or corporation franchise tax credit for qualified
donations made to qualified playgrounds. The amount of the credit is equal to the lesser of $1,000
or one-half of the value of the cash, equipment, goods, or services donated.
Present law (R.S. 47:6009) provides for an income or corporation franchise tax credit for a La.
business or industry that supports and encourages employee basic skills training by satisfying criteria
established in present law and that submit proper and complete applications. The amount of the
credit is $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 (R.S. 47:6012) provides for an income and corporation franchise tax credit for employers
within the state to donate materials, equipment, or instructors to public training providers, secondary
and postsecondary vocational-technical schools, apprenticeship program registered with the La. Workforce Commission, or community colleges to assist in the development of training programs
designed to meet industry needs. The amount of the credit is equal to 50% of the value of the
donated materials, equipment, or services rendered by the instructor.
Present law (R.S. 47:6013) provides for a corporate income and corporation franchise tax credit for
qualified donations made to a public school. The amount of the credit is equal to 40% of the
appraised value of the qualified donation.
Present law (R.S. 47:6014) 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 is equal to 40% of the aggregate ad valorem taxes paid by the
telephone company to the political subdivision.
Present law (R.S. 47:6015) provides for an income and corporation franchise tax credit for taxpayers
who employ persons in the state and claims a federal income tax credit for increasing research
activities. The credit is allowed at varying amounts.
Present law (R.S. 47:6016.1) provides for the La. New Markets Jobs Act for purposes of a tax credit
that may be claimed against insurance premium tax. Eligibility is based on the investment of private
capital in a low-income community business in La. The amount of the credit is authorized in varying
amounts.
Present law (R.S. 47:6017) 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 is equal to the amount of the filing fee
paid.
Present law (R.S. 47:6018) provides for an income or corporation franchise tax credit for purchasers
of specialty apparel items from businesses known as "PIE contractors" that utilize inmate labor in
producing items for sale and then pay 30% of the salary paid to such inmates back to the state. The
amount of the credit is equal to the sales and use tax paid on the purchase.
Present law (R.S. 47:6022) provides for an income or franchise tax credit for La. taxpayers for
investment in state-certified productions for digital interactive media earned at the time expenditures
are made on a state-certified production. The amount of the credit is equal to 25% of the base
investment made by the investor. Additionally provides for a credit equal to 10% of base investment
expended on payroll for La. residents employed in connection with a state-certified production.
Present law (R.S. 47:6023) provides for an income or franchise tax credit for La. taxpayers for
investment in state-certified productions for sound recordings earned at the time expenditures are
made on a state-certified production. The amount of the credit is equal to 25% of the base
investment made by the investor in excess of $15K, or in excess of $5K for investors who are La.
residents. Additionally provides for a credit equal to 10% of base investment expended on payroll
for La. residents employed in connection with a state-certified production. Present law provides an
annual program cap of $3M. Present law (R.S. 47:6025) provides an income tax credit against La. income tax for the amount of
surcharges, market equalization charges, or assessments paid by a taxpayer for the La. Citizens
Property Insurance Corporation assessments levied due to Hurricane Katrina and Rita.
Present law (R.S. 47:6026) provides a credit against income or corporation franchise taxes for a
heritage-based cottage industry located in the Cane River Heritage Area Development Zone. The
credit is provided in an amount up to $1,500.
Present law (R.S. 47:6030) 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 is 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 (R.S. 47:6032) 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 is
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 caps the total aggregate amount
of credits for all producers at $2.5M per calendar year and limits the credit allowed for each producer
at varying amounts.
Present law (R.S. 47:6034) provides for an individual or corporate income tax credit for qualified
production expenditures on investments in a state-certified musical or theatrical production or
infrastructure project. For state-certified higher education musical or theatrical infrastructure
projects that receive initial certification prior to January 1, 2018, a base investment credit may be
earned for expenditures made in the state on or before January 1, 2022 for the construction, repair,
or renovation of a new state-certified higher education musical or theatrical facility infrastructure
project. No more than $10M in tax credits are allowed per project and no more than $60M is
allowed for all state-certified higher education musical or theatrical infrastructure projects. The
credit for an investor is granted in varying amounts.
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.
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. 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
credit allowed is at varying amounts.
Present law (R.S. 47:3037) further 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.
Present law (R.S. 47:6104) 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
is a percentage of a credit provided for in present law and varies depending on the quality rating of
the child care facility.
Present law (R.S. 47:6105) provides for a refundable income or corporation franchise tax credit for
child care providers. The amount of the credit is 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 Department 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 that is
based upon the quality rating of each child care facility operated by the child care.
Present law (R.S. 47:6106) 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.
Present law (R.S. 47:6107) 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.
Proposed law requires the House Committee on Ways and Means to review the credits in present law
no later than September 1, 2015, and make a specific recommendation no later than March 1, 2017,
to either continue the credits or to terminate the credits.
REPEAL OF EXPIRED OR INACTIVE TAX CREDITS
Present law (R.S. 47:6005(D)(2)) provides for an income tax credit for taxpayers for the purchase
of qualified new recycling manufacturing or processing equipment. Further provides a credit of
100% of the purchase price for steelworks and blast furnaces, including coke ovens and rolling mills that are classified as SIC 312 by the Standard Industrial Classification Code. Limited application
to claims made by the taxpayer prior to July 1, 2002.
Present law (R.S. 47:6010) provides an income tax credit for employers who provided certain
qualified alcohol or substance abuse treatment programs to their employees.
Present law (R.S. 47:6028) provides an income or corporation franchise tax credit for the amount
of any overpayment made by a taxpayer with gross receipts from business of $500,000 or less as a
result of failing to claim any inventory tax credit between tax years 1999 through 2002 for income
taxes and 2000 through 2003 for corporation franchise taxes.
Present law (R.S. 47:6029) provides an income or corporation franchise tax for the purchase of an
eligible sugarcane trailer to replace an ineligible sugarcane trailer as provided for in present law. The
credit is allowed in varying amounts, but there is no credit allowed for costs paid on or after Jan. 1,
2014.
Present law (R.S. 47:6033) provides an individual or corporation income tax or corporation franchise
tax credit for employers who employ an eligible apprentice as defined in present law. The amount
of the credit if equal to one dollar for each hour of employment of each eligible apprentice and
applies to taxable periods ending prior to Jan. 1, 2015.
Proposed law repeals present law.
Effective upon signature of governor or lapse of time for gubernatorial action.
(Amends R.S. 47:6105; Adds R.S. 47:6004(C), 6005(G), 6006(E), 6006.1(G), 6007(G), 6008(D),
6009(F), 6012(F), 6013(D), 6014(F), 6015(K), 6016.1(N), 6017(C), 6018(F), 6022(L), 6023(I),
6025(D), 6026(G), 6030(H), 6032(H), 6034(K), 6035(H), 6036(K), 6037(I), 6104(D), 6106(E), and
6107(C); Repeals R.S. 47:6005(D)(2), 6010, 6028, 6029, and 6033)