SLS 17RS-379 ORIGINAL
2017 Regular Session
SENATE BILL NO. 166
BY SENATOR MORRELL
TAX/TAXATION. Terminates certain tax exemptions, exclusions, or deductions in 2021.
(8/1/17)
1 AN ACT
2 To amend and reenact R.S. 3:84 and 147, R.S. 12:425, R.S. 22:2065, R.S. 26:345, R.S.
3 47:48, 51, 121, 713 and 716.1, and to enact R.S. 3:4684(C), R.S. 26:354(L), 366(C)
4 and 421(F), R.S. 45:1177(D), R.S. 47:158(I), 246(H), 287.71(C), 287.73(D),
5 287.86(F), 287.501(C), 287.521(C), 287.732(D), 287.738(H), 287.745(C), 602(I),
6 605(D), 606(G), 632(C), 633.1, 818.13(I) and 823(F) and to repeal certain other
7 exclusions and exemptions against sales tax, relative to taxation; to provide for the
8 elimination of certain tax exemptions, exclusions and deductions; to provide for
9 applicability unless required under certain circumstances; to provide for an effective
10 date; and to provide for related matters.
11 Be it enacted by the Legislature of Louisiana:
12 Section 1. R.S. 3:84 and 147 are hereby amended and reenacted and R.S. 3:4684 (C)
13 are hereby enacted to read as follows:
14 * * *
15 §84. License fee and tax liability
16 A. Each association organized under this Part shall pay an annual license fee
17 of ten dollars to the secretary of state, and shall be exempt from all franchise or other
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1 license taxes, but not from ad valorem property taxes. The provisions of this Section
2 shall likewise apply to associations and corporations organized under the laws of the
3 United States for the sole purpose of extension of credit to farmers and farmers'
4 co-operative associations.
5 B. The exemption provided for pursuant to the provisions of this Section
6 shall terminate and shall have no effect beginning January 1, 2021.
7 * * *
8 §147. Annual license fees
9 A. Each association organized hereunder shall pay an annual license fee of
10 ten dollars, but shall be exempt from all franchise or other license taxes, except upon
11 its real estate, furniture, and fixtures.
12 B. The exemption provided for pursuant to the provisions of this Section
13 shall terminate and shall have no effect beginning January 1, 2021.
14 * * *
15 §4684. Fee to be collected for testing, etc.
16 * * *
17 C. The exemption provided for pursuant to the provisions of this Section
18 shall terminate and shall have no effect beginning January 1, 2021.
19 Section 2. R.S. 12:425 is hereby amended and reenacted and to read as follows:
20 §425. Taxation
21 A. Each cooperative shall pay annually, on or before the first day of July, to
22 the department of revenue, a fee of ten dollars for each one hundred persons or
23 fraction thereof to whom electricity is supplied within the state by it, but shall be
24 exempt from all other excise and income taxes whatsoever.
25 B. The exemption provided for pursuant to the provisions of this Section
26 shall terminate and shall have no effect beginning January 1, 2021.
27 Section 3. R.S. 22:2065 is hereby amended and reenacted to read as follows:
28 §2065. Tax exemption
29 A. The association shall be exempt from payment of all fees and all taxes
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1 levied by this state or any of its subdivisions except taxes levied on real or personal
2 property.
3 B. The exemption provided for pursuant to the provisions of this Section
4 shall terminate and shall have no effect beginning January 1, 2021.
5 * * *
6 Section 4. R.S. 26:345 is hereby amended and reenacted and R.S. 26:354(L), 366(C),
7 421(F) are hereby enacted to read as follows:
8 §345. Discount on taxes on beverages of low alcoholic content
9 A. For accurately reporting and timely remitting the taxes due under the
10 provisions of R.S. 26:342, all taxpayers shall be allowed a discount of one and one-
11 half percent of the amount of the tax otherwise due.
12 B. The deduction provided for pursuant to the provisions of this Section
13 shall terminate and shall have no effect beginning January 1, 2021.
14 * * *
15 §354. Payment and reporting of taxes; discounts; rules and regulations; enforcement;
16 forfeitures and penalties; redemption of tax stamps
17 * * *
18 L. The discount provided for pursuant to the provisions of this Section
19 shall terminate and shall have no effect beginning January 1, 2021.
20 * * *
21 §366. Exported beverages not subject to tax
22 * * *
23 C. The exemption provided for pursuant to the provisions of this Section
24 shall terminate and shall have no effect beginning January 1, 2021.
25 * * *
26 §421. Exempt products
27 * * *
28 F. The exemption provided for pursuant to the provisions of this Section
29 shall terminate and shall have no effect beginning January 1, 2021.
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1 Section 5. R.S. 45:1177(D) is hereby enacted to read as follows:
2 §1177. Inspection and supervision fees; Utility and Carrier Inspection and
3 Supervision Fund
4 * * *
5 D. The exclusion provided for pursuant to the provisions of this Section
6 shall terminate and shall have no effect beginning January 1, 2021.
7 * * *
8 Section 6. R.S. 47:48, 51, 121, 713 and 716.1 are hereby amended and reenacted and
9 R.S. 158(I), 246(H), 287.71(C), 287.73(D), 287.86(F), 287.501(C), 287.521(C), 287.732(D),
10 287.738(H) 287.745(C), 602(I), 605(D), 606(G), 632(C), 633.1, 818.13(I) and 823(F) are
11 hereby enacted to read as follows:
12 §48. Exclusion from gross income; interest on Louisiana state or local government
13 obligations
14 A. The amount of interest received upon obligations of the State of Louisiana,
15 or any political or municipal subdivision thereof, to such extent as is now exempt by
16 law shall not be included in gross income.
17 B. The exclusion provided for pursuant to the provisions of this Section
18 shall terminate and shall have no effect beginning January 1, 2021.
19 * * *
20 §51. Exclusions from gross income; governmental subsidies
21 A. Seventy-two percent of funds accrued by a corporation engaged in
22 operating a public transportation system from any federal, state or municipal
23 governmental entity to subsidize the operation and maintenance of such a
24 transportation system shall not be included in gross income and shall be exempt from
25 taxation under this Chapter. All expenses of operating the transit system incurred by
26 the corporation shall be deductible in arriving at net income.
27 B. The exclusion provided for pursuant to the provisions of this Section
28 shall terminate and shall have no effect beginning January 1, 2021.
29 * * *
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1 §121. Exemptions from tax on corporations
2 A. The following organizations shall be exempt from taxation under this
3 Chapter:
4 (1) Labor, agricultural, or horticultural organizations;
5 (2) Mutual savings banks, national banking corporations and banking
6 corporations organized under the laws of the State of Louisiana who pay a tax for
7 their shareholders or whose shareholders pay a tax on their shares of stock under
8 other laws of this state, and building and loan associations;
9 (3) Fraternal beneficiary societies, orders, or associations operating under
10 the lodge system or for the exclusive benefit of the members of a fraternity itself
11 operating under the lodge system, and providing for the payment of life, sick,
12 accident, or other benefits to members of such society, order or association or their
13 dependents;
14 (4) Cemetery companies owned and operated exclusively for the benefit of
15 their members or which are not operated for profit; and any corporation chartered
16 solely for burial purposes as a cemetery corporation and not permitted by its charter
17 to engage in any business not necessarily incident to that purpose, no part of the net
18 earnings of which inures to the benefit of any private shareholder or individual;
19 (5) Corporations and any community chest, fund, or foundation, organized
20 and operated exclusively for religious, charitable, scientific, literary, or educational
21 purposes or for the prevention of cruelty to children or animals, no part of the net
22 earnings of which inures to the benefit of any private shareholder or individual, and
23 no substantial part of the activities of which is carrying on propaganda, or otherwise
24 attempting to influence legislation. Any corporation, community chest, fund or
25 foundation which annually or more frequently contributes all of its current net
26 earnings, less a reasonable reserve not to exceed $1,000 for anticipated expenses and
27 future contributions, to organizations which are organized and operated exclusively
28 for religious, charitable, scientific, literary or educational purposes, or for the
29 prevention of cruelty to children or animals, shall itself be deemed organized and
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1 operated exclusively for religious, charitable, scientific, literary or educational
2 purposes, or for the prevention of cruelty to children or animals, provided that said
3 corporation, community chest, fund or foundation is not engaged in the active
4 conduct of a trade or business, no part of its net earnings inures to the benefit of any
5 private shareholder or individual and no substantial part of its activities is carrying
6 on propaganda or otherwise attempting to influence legislation;
7 (6) Business leagues, chambers of commerce, real estate boards, or boards
8 of trade, not organized for profit and no part of the net earnings of which inures to
9 the benefit of any private shareholder or individual;
10 (7) Civic leagues or organizations not organized for profit but operated
11 exclusively for the promotion of social welfare, or local associations of employees,
12 the membership of which is limited to the employees of a designated person or
13 persons in a particular municipality, and the net earnings of which are devoted
14 exclusively to charitable, educational, or recreational purposes, and no substantial
15 part of the activities of which is carrying on propaganda, or otherwise attempting to
16 influence legislation;
17 (8) Clubs organized and operated exclusively for pleasure, recreation, and
18 other nonprofitable purposes, no part of the net earnings of which inures to the
19 benefit of any private shareholder;
20 (9) Benevolent life insurance associations of a purely local character, mutual
21 ditch or irrigation companies, mutual or cooperative telephone companies, or like
22 organizations, but only if eighty-five per centum (85%) or more of the income
23 consists of amounts collected from members for the sole purpose of meeting losses
24 and expenses;
25 (10) Farmers' or other mutual hail, cyclone, casualty, or fire insurance
26 companies or associations (including interinsurers and reciprocal underwriters) the
27 income of which is used or held for the purpose of paying losses or expenses;
28 (11) Farmers', fruitgrowers', or like associations organized and operated on
29 a cooperative basis for the purpose of marketing the products of members or other
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1 producers, and turning back to them the proceeds of sales, less the necessary
2 marketing expenses, on the basis of either the quantity or the value of the product
3 furnished by them, or for the purpose of purchasing supplies and equipment for the
4 use of members or other persons, and turning over such supplies and equipment to
5 them at actual cost, plus necessary expenses. Exemption shall not be denied any
6 such association because it has capital stock, if the dividend rate of such stock is
7 fixed at not to exceed the legal interest rate per annum on the value of the
8 consideration for which the stock was issued, and if substantially all of such stock
9 (other than nonvoting preferred stock, the owners of which are not entitled or
10 permitted to participate, directly or indirectly, in the profits of the association, upon
11 dissolution or otherwise, beyond the fixed dividends) is owned by producers who
12 market their products or purchase their supplies and equipment through the
13 association; nor shall exemption be denied any such association because there is
14 accumulated and maintained by it a reserve required by state law or a reasonable
15 reserve for any necessary purpose. Such an association may market the products of
16 nonmembers in an amount the value of which does not exceed the value of the
17 products marketed for members, and may purchase supplies and equipment for
18 nonmembers in an amount the value of which does not exceed the value of the
19 supplies and equipment purchased for members, provided the value of the purchases
20 made for persons who are neither members nor producers does not exceed fifteen per
21 cent of the value of all its purchases;
22 (12) Corporations organized by an association exempt under the provisions
23 of Paragraph (11) of this Section or members thereof, for the purpose of financing
24 the ordinary crop operations of such members or other producers, and operated in
25 conjunction with such association. Exemption shall not be denied any such
26 corporation because it has capital stock, if the dividend rate of such stock is fixed at
27 not to exceed the legal interest rate per annum on the value of the consideration for
28 which the stock was issued, and if substantially all such stock (other than nonvoting
29 preferred stock, the owners of which are not entitled or permitted to participate,
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1 directly or indirectly, in the profits of the corporation, upon dissolution, or otherwise,
2 beyond the fixed dividends) is owned by such association, or members thereof; nor
3 shall exemption be denied any such corporation because there is accumulated and
4 maintained by it a reserve required by state law or a reasonable reserve for any
5 necessary purpose;
6 (13) Corporations organized for the exclusive purpose of holding title to
7 property, collecting income therefrom, and turning over the entire amount thereof,
8 less expenses, to organizations which are organized and operated exclusively for
9 religious, charitable, scientific, literary, and educational purposes, no part of the net
10 earnings of which inures to the benefit of any private stockholder;
11 (14) Voluntary employees' beneficiary association providing for the payment
12 of life, sick, accident, or other benefits to the members of such association or their
13 dependents, if no part of their net earnings inures (other than through such payments)
14 to the benefit of any private shareholder or individual, and if eighty-five per centum
15 (85%) or more of the income consists of amounts collected from members for the
16 sole purpose of making such payments and meeting expenses;
17 (15) Teachers' retirement fund associations of a purely local character, if no
18 part of their net earnings inures (other than through payment of retirement benefits)
19 to the benefit of any private shareholder or individual, and if the income consists
20 solely of amounts received from public taxation, amounts received from assessments
21 upon the teaching salaries of members, and income in respect of investments.
22 B. The deduction provided for pursuant to the provisions of this Section
23 shall terminate and shall have no effect beginning January 1, 2021.
24 * * *
25 §158. Basis for depletion
26 * * *
27 I. The deduction provided for pursuant to the provisions of this Section
28 shall terminate and shall have no effect beginning January 1, 2021.
29 * * *
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1 §246. Corporations; deduction from net income from Louisiana sources
2 * * *
3 H. The deduction provided for pursuant to the provisions of this Section
4 shall terminate and shall have no effect beginning January 1, 2021.
5 * * *
6 §287.71. Modifications to federal gross income
7 * * *
8 C. The deduction provided for pursuant to the provisions of this Section
9 shall terminate and shall have no effect beginning January 1, 2021.
10 * * *
11 §287.73. Modifications to deductions from gross income allowed by federal law
12 * * *
13 D. The deduction provided for pursuant to the provisions of this Section
14 shall terminate and shall have no effect beginning January 1, 2021.
15 * * *
16 §287.86. Net operating loss deduction
17 * * *
18 F. The deduction provided for pursuant to the provisions of this Section
19 shall terminate and shall have no effect beginning January 1, 2021.
20 * * *
21 §287.501. Exemption from tax on corporations
22 * * *
23 C. The exemption provided for pursuant to the provisions of this Section
24 shall terminate and shall have no effect beginning January 1, 2021.
25 §287.521. Farmers' cooperatives; all cooperatives
26 * * *
27 C. The deduction provided for pursuant to the provisions of this Section
28 shall terminate and shall have no effect beginning January 1, 2021.
29 * * *
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1 §287.732. S Corporations
2 * * *
3 D. The deduction provided for pursuant to the provisions of this Section
4 shall terminate and shall have no effect beginning January 1, 2021.
5 * * *
6 §287.738. Other inclusions and exclusions from gross income
7 * * *
8 H. The deduction provided for pursuant to the provisions of this Section
9 shall terminate and shall have no effect beginning January 1, 2021.
10 * * *
11 §287.745. Deductions from gross income; depletion
12 * * *
13 C. The deduction provided for pursuant to the provisions of this Section
14 shall terminate and shall have no effect beginning January 1, 2021.
15 * * *
16 §602. Determination of taxable capital
17 * * *
18 I. The deduction provided for pursuant to the provisions of this Section
19 shall terminate and shall have no effect beginning January 1, 2021.
20 * * *
21 §605. Surplus and undivided profits
22 * * *
23 D. The deduction provided for pursuant to the provisions of this Section
24 shall terminate and shall have no effect beginning January 1, 2021.
25 * * *
26 §606. Allocation of taxable capital
27 * * *
28 G. The deduction provided for pursuant to the provisions of this Section
29 shall terminate and shall have no effect beginning January 1, 2021.
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1 * * *
2 §632. Taxes payable by owners; lien and privilege created
3 * * *
4 C. The exemption provided for pursuant to the provisions of this Section
5 shall terminate and shall have no effect beginning January 1, 2021.
6 * * *
7 §633.1. Tax deduction on natural resources severed on oil severed from the soil
8 or water
9 The deductions provided for in R.S. 47:633 shall terminate and shall
10 have no effect beginning January 1, 2021.
11 * * *
12 §713. Exclusions and exemptions; casinghead gasoline sold for commercial blending
13 A. For the purposes of this Part, the product commonly known as casinghead
14 and absorption gasoline shall be excepted from the operation of the tax levied, when
15 sold to be blended or compounded with other less volatile liquids in the manufacture
16 of commercial gasoline or motor fuel. When, however, such casinghead and
17 absorption gasoline is used without blending as a motor fuel or is sold for use in
18 motors direct, or sold to those who blend for their own use, the taxes levied in R.S.
19 47:711 shall be paid. Reports of all such sales shall be furnished to the secretary with
20 the report required in R.S. 47:712, and shall show whether the sales were made for
21 blending purposes or for use in motors.
22 B. The exemption provided for pursuant to the provisions of this Section
23 shall terminate and shall have no effect beginning January 1, 2021.
24 * * *
25 §716.1. Exclusions and exemptions; aviation gasoline
26 A. Aviation gasoline commonly used for propelling aircraft shall be exempt
27 from the tax levied by this Part. For the purpose of this Section, aviation gasoline
28 shall be defined as set forth in specification Number D 910 of the American Society
29 for Testing and Materials.
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1 B. The exemption provided for pursuant to the provisions of this Section
2 shall terminate and shall have no effect beginning January 1, 2021.
3 * * *
4 §818.13. Point of imposition of the tax
5 * * *
6 I. The exemption provided for pursuant to the provisions of this Section
7 shall terminate and shall have no effect beginning January 1, 2021.
8 * * *
9 §823. Rate of tax
10 * * *
11 F. The deduction provided for pursuant to the provisions of this Section
12 shall terminate and shall have no effect beginning January 1, 2021.
13 Section 7. Notwithstanding any other law to the contrary, any exclusion or
14 exemption provided in state law shall not apply to any sales and use tax levied under the
15 provisions of R.S. 47:302, 321, 321.1, 331, or R.S. 51:1286 except as follows:
16 (A) Any exclusion or exemption which causes the tax to be levied upon a sale
17 which is not a retail sale of, not a use, consumption, distribution, or storage for use
18 or consumption of, or not the lease or rental of, an item or article of tangible personal
19 property.
20 (B) The exclusion or exemption is required by federal law or the Constitution
21 of the United States.
22 (C) The exclusion or exemption is required pursuant to an agreement by the
23 state of Louisiana for the operation of a public facility.
24 Section 8. The provisions of this Act concerning exclusions and exemptions
25 applicable to R.S. 47:302, 321, 321.1 and 331 and R.S. 51:1286 shall be applicable to all
26 taxable periods beginning on and after January 1, 2018.
27 Section 9. This Act shall become effective on August 1, 2017; if vetoed by the
28 governor and subsequently approved by the legislature, this Act shall become effective on
29 August 1, 2017, or on the day following such approval by the legislature, whichever is later.
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The original instrument and the following digest, which constitutes no part
of the legislative instrument, were prepared by James Benton.
DIGEST
SB 166 Original 2017 Regular Session Morrell
Present law provides for the following exemptions, exclusions and deductions:
(1)R.S. 3:84 - License fee and tax liability
(2)R.S. 12:425 - Taxation
(3)R.S. 22:2065 - Tax exemption
(4)R.S. 26:345 - Discount on taxes on beverages of low alcoholic content
(5)R.S. 47:48 - Exclusion from gross income; interest on Louisiana state or local
government obligations
(6)R.S. 47:51 - Exclusions from gross income; governmental subsidies
(7)R.S. 47:121 - Exemptions from tax on corporations
(8)R.S. 47:633 - Rates of tax
(9)R.S. 47:713 - Exclusions and exemptions; casinghead gasoline sold for commercial
blending
(10)R.S. 47:716.1 - Exclusions and exemptions; aviation gasoline
(11)R.S. 3:147 - Annual license fees
(12)R.S. 3:4684 - Fee to be collected for testing, etc.
(13)R.S. 26:354 - Payment and reporting of taxes; discounts; rules and regulations;
enforcement; forfeitures and penalties; redemption of tax stamps
(14)R.S. 26:366 - Exported beverages not subject to tax
(15)R.S. 26:421 - Exempt products
(16)R.S. 45:1177 - Inspection and supervision fees; Utility and Carrier Inspection and
Supervision Fund
(17)R.S. 47:158 - Basis for depletion
(18)R.S. 47:246 - Corporations; deduction from net income from Louisiana sources
(19)R.S. 47:287.71 - Modifications to federal gross income
(20)R.S. 47:287.73 - Modifications to deductions from gross income allowed by federal
law
(21)R.S. 47:287.86 - Net operating loss deduction
(22)R.S. 47:287.501 - Exemption from tax on corporations
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(23)R.S. 47:287.521 - Farmers' cooperatives; all cooperatives
(24)R.S. 47:287.732 - S Corporations
(25)R.S. 47:287.738 - Other inclusions and exclusions from gross income
(26)R.S. 47:287.745 - Deductions from gross income; depletion
(27)R.S. 47:602 - Determination of taxable capital
(28)R.S. 47:605 - Surplus and undivided profits
(29)R.S. 47:606 - Allocation of taxable capital
(30)R.S. 47:632 - Taxes payable by owners; lien and privilege created
(31)R.S. 47:713 - Exclusions and exemptions; casinghead gasoline sold for commercial
blending
(32)R.S. 47:716.1 - Exclusions and exemptions; aviation gasoline
(33)R.S. 818.13 - Point of imposition of the tax
(34)R.S. 47:823 - Rate of tax
Proposed law eliminates present law on January 1, 2021.
Proposed law provides that exclusions or exemptions in state law do not apply to any sales
and use tax levied under R.S. 47:302, 321, 321.1, 331, or R.S. 51:1286 except as follows:
(1)Any exclusion or exemption which causes the tax to be levied upon a sale which is
not a retail sale of, not a use, consumption, distribution, or storage for use or
consumption of, or not the lease or rental of, an item or article of tangible personal
property.
(2)The exclusion or exemption is required by federal law or the Constitution of the
United States.
(3)The exclusion or exemption is required pursuant to an agreement by the state of
Louisiana for the operation of a public facility.
Proposed law provides that the limitation on such exclusions or exemptions apply to all
taxable periods beginning on or after January 1, 2018.
Effective August 1, 2017.
(Amends R.S. 3:84 and 147, R.S. 12:425, R.S. 22:2065, R.S. 26:345, R.S. 47:48, 51, 121,
713 and 716.1; adds R.S. 3:4684(C), R.S. 26:354(L), 366(C) and 421(F), R.S. 45:1177(D),
R.S. 47:158(I), 246(H), 287.71(C), 287.73(D), 287.86(F), 287.501(C), 287.521(C),
287.732(D), 287.738(H), 287.745(C), 602(I), 605(D), 606(G), 632(C), 633.1, 818.13(I) and
823(F))
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