Louisiana House Bill HB804

Louisiana 2015 Regular Session

• Introduced: 4/22/15
• Refer: 4/27/15

Caption

Provides for the carry forward rather than the refund of the research and development tax credit

Impact

If enacted, the bill will specifically impact the tax liabilities of businesses engaged in R&D by allowing them to utilize tax credits for more extended periods. This allows businesses more flexibility in managing their tax obligations and potentially encourages them to invest more in innovation, as they have the assurance that their tax credits will not simply expire if unused in the current tax year. The change has the potential for a more favorable business climate, particularly for small and mid-sized companies actively engaged in research.

Summary

House Bill 804 aims to modify the tax credit system for businesses that undertake research and development (R&D) activities in Louisiana. The bill proposes to change the current refundable tax credit into a system where unused credits can be carried forward for up to five years rather than being refunded immediately. This approach is targeted at providing some fiscal relief to businesses during tax years when their tax liabilities might be lower than the credits they qualify for, helping encourage long-term investment in research activities.

Sentiment

The sentiment surrounding HB 804 appears supportive among business communities and organizations advocating for greater innovation and economic development. Proponents contend that modifying tax credits will lead to more stable and secure funding opportunities for R&D projects. However, there may be caution raised by some legislators concerned about the impact on state revenue and whether such incentives adequately spur the desired economic growth.

Contention

Key points of contention involve the balance between supporting businesses through tax credits and the implications for state funding. Some legislators may question whether modifying the credits could lead to a loss of immediate tax revenue without clear guarantees of economic return. Opponents might argue that diverting funds to tax credits could limit resources for other critical state services. Overall, the discussion emphasizes the need to evaluate the effectiveness of tax incentives in truly fostering innovation and growth within the state's economy.