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 300 Reengrossed 2017 Regular Session Davis
Abstract: Extends the research and development tax credit program for three years, reduces the
amount of the credits, and allows for transferability of the Small Business Innovation
Research Grant credit.
Present law authorizes an income and corporation franchise tax credit for certain taxpayers who
employ 50 or more persons and claim a federal income tax credit for increasing research activities.
This tax credit is also available for tax payers who employ fewer than 50 employees if the employer
meets certain eligibility requirements.
Present law authorizes the following credits as a percentage of increased research expenses for a
taxpayer who employs the following number of employees:
Number of EmployeesTax Credit
100 or more 8%
50-99 20%
fewer than 50 40%
Proposed law authorizes the following credits:
Number of EmployeesTax Credit
100 or more 5%
50-99 10%
fewer than 50 30%
Present law allows a taxpayer receiving a federal Small Business Innovation Research Grant a tax
credit in an amount equal to 40% of the award received during the tax year. Proposed law reduces
the tax credit from 40% to 30% of the award received during the tax year.
Proposed law authorizes credits based upon participation in the Small Business Innovation Research
Grant program for 2018 and thereafter to be transferred or sold to one or more La. taxpayers. To
utilize the transferred tax credit, proposed law requires transferors and transferees to submit to the Dept. of Revenue written notification of any transfer or sale of this tax credit within 10 business days
after the transfer or sale.
Proposed law further requires that a sale or transfer of the tax credit shall not be effective until
recorded in the tax credit registry in accordance with present law.
Proposed law authorizes carryforward of the credit beginning on the date on which the credit was
earned, regardless of when the credit was transferred or sold.
Present law defines "base amount" for purposes of calculating the amount of the credits as 70% of
the average annual qualified research expenses in La. during the 3 years preceding the taxable year.
Proposed law changes present law by redefining "base amount" depending upon the number of
persons the taxpayer employs.
Proposed law increases the "base amount" for purposes of a taxpayer that employs 50 or more
persons from 70% to 80% of the average annual qualified research expenses in La. during the three
years preceding the taxable year.
Proposed law decreases the "base amount" for purposes of a taxpayer that employs less than 50
persons from 70% to 50% of the average annual qualified research expenses in La. during the three
preceding taxable years.
Present law provides that no credit shall be allowed for research expenditures incurred or Small
Business Innovation Research Grant funds received after Dec. 31, 2019.
Proposed law extends the credit availability to research expenditures incurred on or before Dec. 31,
2021.
Proposed law shall apply to tax years beginning on or after Jan. 1, 2017.
Effective upon signature of governor or lapse of time for gubernatorial action.
(Amends R.S. 47:6015(C)(2), (D), (E)(1), and (J))
Summary of Amendments Adopted by House
The Committee Amendments Proposed by House Committee on Ways and Means to the original
bill:
1. Change the employee threshold for the 5% tax credit in proposed law from one that
employs fifty or more persons to one that employ 100 or more.
2. Reduce the amount of the tax credit for a taxpayer that employs 50 - 99 persons from
20% to 10%. 3. Redefine "base amount" for purposes of calculating the credit based on the number of
employees.
The House Floor Amendments to the engrossed bill:
1. Made technical amendments.