Makes permanent reductions to certain tax incentive rebate programs. (gov sig) (RE INCREASE GF RV See Note)
Impact
The legislation will limit the sales and use tax rebate for businesses to 80% of the state and local sales taxes paid on the construction of qualified facilities, alongside a reduction in project facility expense rebates from 1.5% to 1.2% of qualified capital expenditures. Furthermore, it extends the timeline for the Department of Revenue to process rebate requests, changing it from ten business days to sixty days, and extends the audit period from three months to six months. These adjustments signify a substantial policy shift towards reduced financial incentives for new developments within the state.
Summary
Senate Bill 493 aims to make permanent reductions to certain tax incentive rebate programs in Louisiana. Specifically, the bill removes the sunset provision from existing law that previously allowed for a 20% reduction in payroll rebates under programs like the Louisiana Quality Jobs and Competitive Projects Payroll Incentive tax incentives. By enacting this change, the bill effectively solidifies lower rebate rates for businesses engaged in state-sponsored economic projects without reverting back to higher rates after an expiration date.
Sentiment
The sentiment surrounding SB 493 is mixed among lawmakers and stakeholders. Proponents argue that the bill provides essential fiscal responsibility by limiting taxpayer liabilities associated with incentive programs, ensuring that state funds are not overextended for economic development. However, critics contend that these reductions may deter new business investments or expansions in Louisiana by weakening financial incentives that encourage job creation and economic activity. The tension between fiscal prudence and economic growth is a prevailing theme in discussions surrounding this bill.
Contention
Key points of contention include the potential negative impact on business attraction and retention in Louisiana. Advocates for the bill maintain that the reductions align with responsible budgeting, whereas opponents fear that these changes might disincentivize new projects and adversely affect employment growth. The debate highlights a broader conflict regarding the role of government in economic stimulation and whether limiting rebates aligns with fostering a competitive business environment in Louisiana.
Makes permanent reductions to credits and rebates under the Enterprise Zone, Quality Jobs, and Competitive Project Payroll Incentive programs. (Items #26 and 27) (gov sig) (EG +$23,290,000 GF RV See Note)
Provides for administration of incentive rebates under the Quality Jobs and Enterprise Zone programs. (Items #21 and 27)(gov sig) (REF -$3,128,880 GF RV See Note)
Reduces the amount of the rebate for the Competitive Projects Payroll Incentive Program and provide for continued effectiveness of reductions in the amount of certain rebates (Item #3) (EG +$11,000,000 GF RV See Note)
Provides relative to enterprise zone requirements, incentives, and effectiveness, and establishes a sunset date for the program. (Item #27)(gov sig) (RE INCREASE GF RV See Note)
Provides for a flat rate for purposes of calculating corporate income tax and terminates certain corporate income tax exemptions, deductions, and credits (Item #4) (EN SEE FISC NOTE RV See Note)
Provides for the prohibition of the expenditure of state funds to refund a tax credit, pay certain rebates, or repurchase or grant transferable tax credits granted through incentive contracts unless budgeted and appropriated. (gov sig)
Establishes the High Impact Job Program within Louisiana Economic Development and provides for administration of the program (EN SEE FISC NOTE SD EX See Note)
Provides for school board information to be accessible on the Louisiana Fiscal Transparency Website known as Louisiana Checkbook (EN INCREASE GF EX See Note)