Louisiana House Bill HB754

Louisiana 2015 Regular Session

• Introduced: 4/3/15
• Refer: 4/3/15
• Refer: 4/13/15

Caption

Provides relative to awarding research and development tax credits

Impact

By revising eligibility criteria for the R&D tax credits, HB 754 seeks to repeal provisions that allow certain businesses without a pending or issued U.S. patent to qualify for these credits. This change aims to tighten the qualification requirements to ensure that funds are allocated to genuine innovative activities. The implications for businesses engaging in research and development are significant; while it may limit some entities from obtaining credits, the overall intent is to direct resources to projects with verified technical merit and substantial economic potential.

Summary

House Bill 754 aims to amend and enhance the administration of research and development (R&D) tax credits in Louisiana. The bill explicitly provides a framework for the appeals process when the Department of Economic Development denies applications for these tax credits. It proposes that if there is no action taken on an application within a year, or if a partial application is denied, the taxpayer has the right to appeal the decision to the Board of Tax Appeals. This introduces a level of accountability and transparency in the assessment of tax credit applications, which is crucial for fostering innovation and investment in the state's economy.

Sentiment

The reception of HB 754 appears to be generally positive among proponents of economic development and innovation in Louisiana. Supporters argue that clarifying the appeals process and ensuring that only patent-holding entities can receive credits aligns state policy with best practices in fostering a competitive R&D environment. Conversely, there may be contention from affected businesses who could be ousted from eligibility for credits, raising concerns about potential impacts on small businesses and startups reliant on these financial incentives for growth.

Contention

Notably, the bill reflects ongoing debates about regulatory control and the role of government in supporting economic development. Critics might express concerns over the tightening of eligibility, positing that it could hamper smaller or newer firms' ability to innovate if they find themselves unable to qualify for the credits. The repeal of eligibility for businesses lacking patents may disproportionately affect those in the early stages of development who have yet to secure intellectual property rights, thus raising questions about inclusivity in state economic policy.