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2018 Second Extraordinary Session
SENATE BILL NO. 23
BY SENATOR MORRELL
TAX/TAXATION. Changes certain rebates to nonrefundable tax credits. (gov sig)
1 AN ACT
2 To amend and reenact the introductory paragraph of R.S. 51:1787(A), R.S.
3 51:1787(A)(1)(c), and the introductory paragraph of R.S. 51:2456(B)(1) and to enact
4 R.S. 51:1787(A)(1)(d) and 2456(C), relative to tax credits and rebates; to change
5 certain rebates to nonrefundable tax credits; and to provide for related matters.
6 Be it enacted by the Legislature of Louisiana:
7 Section 1. The introductory paragraph of R.S. 51:1787(A), R.S. 51:1787(A)(1)(c),
8 and the introductory paragraph of R.S. 51:2456(B)(1) are hereby amended and reenacted and
9 R.S. 51:1787(A)(1)(d) and 2456(C) are hereby enacted to read as follows:
10 §1787. Incentives
11 A. The For advance notifications filed before July 1, 2018, the board, after
12 consultation with the secretaries of the Department of Economic Development and
13 Department of Revenue, and with the approval of the governor, may enter into
14 contracts not to exceed five years to provide:
15 (1) For either:
16 * * *
17 (c) For advance notifications filed on or after July 1, 2018, the board,
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1 after consultation with the secretaries of the Department of Economic
2 Development and Department of Revenue, and with the approval of the
3 governor, may enter into contracts not to exceed five years to provide a
4 nonrefundable investment income tax credit equal to one and one-half percent
5 of the amount of qualified expenditures.
6 (i) For purposes of this credit, the term "qualified expenditures" shall
7 mean amounts classified as capital expenditures for federal income tax purposes
8 plus exclusions from capitalization provided for in Internal Revenue Code
9 Section 263(a)(1)(A) through (L), minus the capitalized cost of land, capitalized
10 leases of land, capitalized interest, capitalized costs of manufacturing machinery
11 and equipment to the extent the capitalized manufacturing machinery and
12 equipment costs are excluded from sales and use tax pursuant to R.S. 47:301(3),
13 and the capitalized cost for the purchase of an existing building. When a
14 taxpayer purchases an existing building and capital expenditures are used to
15 rehabilitate the building, the costs of the rehabilitation only shall be considered
16 qualified expenditures. Additionally, a taxpayer shall be allowed to increase
17 their qualified expenditures to the extent a taxpayer's capitalized basis is
18 properly reduced by claiming a federal credit.
19 (ii) A taxpayer earns the investment tax credit in the year in which the
20 project is placed in service, but the taxpayer may not claim the investment tax
21 credit until the Department of Economic Development signs the project
22 completion report or such other time as provided for by rule or regulation.
23 (iii) Final application for the investment income tax credit granted
24 pursuant to this Subsection shall be filed no later than six months after the
25 Department of Economic Development signs a project completion report and
26 sends it to the Department of Revenue, the political subdivision, and the
27 business, or no later than thirty days after the end of the calendar year in the
28 case of customer-owned tooling used in a compression molding process. The
29 project completion report cannot be signed until the project is complete and the
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1 contract has been approved by the board and the governor.
2 (iv) This tax credit may be applied to any state income tax liability or any
3 state franchise tax liability within a ten-year period from the date that the
4 contract becomes effective or until the entire credit is used, whichever occurs
5 first.
6 (c)(d)(i) For projects for which the advance notification is filed on or after
7 April 1, 2016, the amount of the rebate of sales and use taxes and the investment
8 income tax credit granted pursuant to the provisions of this Paragraph shall not
9 exceed one hundred thousand dollars per net new job created under this Chapter.
10 (ii) A business shall not receive any sales and use tax rebate or refundable
11 investment income tax credit until it has provided all documentation, including filing
12 the annual certification report as required by rule, and has shown proof of the
13 creation of the net new jobs.
14 (iii) For purposes of determining the maximum rebate or income tax credit
15 allowed, each net new job shall only be counted once. The limitation provided for
16 in this Subparagraph shall only apply to the sales and use tax rebates and refundable
17 investment income tax credits granted to businesses participating in the Enterprise
18 Zone Program.
19 * * *
20 §2456. Rebate; payments; additional investment tax credit
21 * * *
22 B.(1) In For advance notifications filed before July 1, 2018, in addition
23 to the rebates provided in this Chapter, an employer who has executed a contract
24 under the provisions of this Chapter and who meets the requirements of R.S.
25 51:2455(E) shall be entitled to either:
26 * * *
27 C. For advance notifications filed on or after July 1, 2018, in addition to
28 the payroll rebates provided in this Chapter, an employer who has executed a
29 contract under the provisions of this Chapter and who meets the requirements
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1 of R.S. 51:2455(E) shall be entitled to a nonrefundable investment income tax
2 credit equal to one and one-half percent of the amount of qualified
3 expenditures.
4 (1) For purposes of this credit, the term "qualified expenditures" shall
5 mean amounts classified as capital expenditures for federal income tax purposes
6 plus exclusions from capitalization provided for in Internal Revenue Code
7 Section 263(a)(1)(A) through (L), minus the capitalized cost of land, capitalized
8 leases of land, capitalized interest, capitalized costs of manufacturing machinery
9 and equipment to the extent the capitalized manufacturing machinery and
10 equipment costs are excluded from sales and use tax pursuant to R.S. 47:301(3),
11 and the capitalized cost for the purchase of an existing building. When a
12 taxpayer purchases an existing building and capital expenditures are used to
13 rehabilitate the building, the costs of the rehabilitation only shall be considered
14 qualified expenditures. Additionally, a taxpayer shall be allowed to increase his
15 qualified expenditures to the extent a taxpayer's capitalized basis is properly
16 reduced by claiming a federal credit.
17 (2) A taxpayer earns the investment tax credit in the year in which the
18 project is placed in service, but the taxpayer may not claim the investment tax
19 credit until the Department of Economic Development signs the project
20 completion report or such other time as provided for by rule or regulation.
21 (3) Final application for the investment income tax credit granted
22 pursuant to this Subsection shall be filed no later than six months after the
23 Department of Economic Development signs a project completion report and
24 sends it to the Department of Revenue, the political subdivision, and the
25 business, or no later than thirty days after the end of the calendar year in the
26 case of customer-owned tooling used in a compression molding process. The
27 project completion report cannot be signed until the project is complete and the
28 contract has been approved by the board and the governor.
29 (4) This tax credit may be applied to any state income tax liability or any
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1 state franchise tax liability within a ten-year period from the date that the
2 contract becomes effective or until the entire credit is used, whichever occurs
3 first.
4 Section 2. This Act shall become effective upon signature by the governor or, if not
5 signed by the governor, upon expiration of the time for bills to become law without signature
6 by the governor, as provided by Article III, Section 18 of the Constitution of Louisiana. If
7 vetoed by the governor and subsequently approved by the legislature, this Act shall become
8 effective on the day following such approval.
The original instrument and the following digest, which constitutes no part
of the legislative instrument, were prepared by Leonore Heavey.
DIGEST
SB 23 Original 2018 Second Extraordinary Session Morrell
Present law provides businesses that are a party to an enterprise zone contract either a rebate
of sales tax paid for purchases of machinery and equipment and on purchases of the material
used in the construction or improvement of a facility or a refundable investment tax credit
of 1.5% of the capitalized costs of construction of the facility.
Proposed law eliminates the sales tax rebate option for enterprise zone advance notifications
filed on or after July 1, 2018.
Proposed law retains the 1.5% investment tax credit, but changes the credit from a
refundable tax credit to a nonrefundable tax credit with a 10-year carryforward for advance
notifications filed on or after July 1, 2018.
Present law provides businesses that are a party to a quality jobs contract either a rebate of
sales tax paid for purchases of machinery and equipment and on purchases of the material
used in the construction or improvement of a facility or a rebate of 1.5% of the capitalized
costs of construction of the facility.
Proposed law eliminates the sales tax rebate option for quality jobs advance notifications
filed on or after July 1, 2018.
Proposed law retains the 1.5% capitalized project cost incentive, but changes the incentive
from a rebate to a nonrefundable income and corporation franchise investment tax credit
with a 10-year carryforward for advance notifications filed on or after July 1, 2018.
Effective upon the signature of the governor.
(Amends R.S. 51:1787(A)(intro para), R.S. 51:1787(A)(1)(c), and of R.S. 51:2456(B)(1)
(intro para); adds R.S. 51:1787(A)(1)(d) and 2456(C))
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