Provides for termination of income and corporation franchise tax credits. (gov sig) (OR SEE FISC NOTE GF RV)
If enacted, SB 173 would significantly impact state tax laws, particularly in the domain of business incentives and credits. By terminating these credits, the bill potentially shifts the tax burden back to businesses that had relied on these incentives to minimize their tax liabilities. This change is expected to affect various sectors that participated in programs aimed at job creation and economic growth via the tax credit system. The repeal may lead to greater revenue generation for the state in the short term; however, the long-term implications for economic development remain to be scrutinized in legislative sessions and discussions.
Senate Bill 173, introduced by Senator Morrell during the 2017 Regular Session, seeks to terminate certain income and corporation franchise tax credits in Louisiana. This includes provisions that eliminate eligibility for various tax credits for qualifying activities after December 31, 2017. The bill also aims to amend existing statutes related to tax credits, notably those tied to utilities, employment incentives, and donations to education and economic development initiatives, effectively repealing certain expired tax credits. The proposed changes signify a broad restructuring of tax incentives that had previously been available to businesses and organizations within the state.
The sentiment surrounding SB 173 appears mixed within legislative circles. Supporters of the bill argue that eliminating outdated and less effective tax credits strengthens fiscal responsibility and allows the state to reclaim necessary revenues for public services. They contend that a more streamlined tax code is beneficial for the state’s economic framework. Conversely, critics highlight concerns about the potential stifling of new business initiatives and claim that these tax credits are crucial for promoting economic activity and job creation in various sectors, particularly in underserved areas.
Notable points of contention in the discussions surrounding SB 173 include debates around the necessity of tax credits for fostering economic growth versus the need for the state to maintain fiscal stability. Some lawmakers expressed concern that the bill may disproportionately impact small businesses that depend on such credits for viability. The discussions raise critical questions about the balance between state control over fiscal policy and the incentives needed to draw investment, stimulate job growth, and support local economies. Overall, the bill encapsulates a broader dialogue about the role of tax credits in shaping Louisiana's economic landscape.