HLS 19RS-999 ENGROSSED
2019 Regular Session
HOUSE BILL NO. 586
BY REPRESENTATIVE JIMMY HARRIS AND SENATORS MORRELL AND
WALSWORTH
TAX CREDITS: Authorizes an enhanced Angel Investor tax credit for investments made
in Louisiana Entrepreneurial Businesses located in federally established opportunity
zones
1 AN ACT
2To amend and reenact R.S. 47:6020(D)(2)(a) and (G) and to enact R.S. 47:6020(H), relative
3 to tax credits; to provide with respect to the Angel Investor Tax Credit program; to
4 authorize an enhanced tax credit for certain eligible investments; to provide for
5 certain limitations and requirements; to extend the termination date of the program;
6 to provide for an effective date; and to provide for related matters.
7Be it enacted by the Legislature of Louisiana:
8 Section 1. R.S. 47:6020(D)(2)(a) and (G) are hereby amended and reenacted and
9R.S. 47:6020(H) is hereby enacted to read as follows:
10 ยง6020. Angel Investor Tax Credit Program
11 * * *
12 D. Tax credits.
13 * * *
14 (2)(a) An investor may apply for and, if qualified, be granted a credit on any
15 income or corporation franchise tax liability owed to the state by the taxpayer
16 seeking to claim the credit in the amount approved by the secretary of the
17 department. The amount of the tax credit shall be based upon the amount of money
18 invested by the investor in the Louisiana Entrepreneurial Business, which investment
19 shall not exceed seven hundred twenty thousand dollars per year per business and
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HB NO. 586
1 one million four hundred forty thousand dollars total per business. Except as
2 otherwise provided in Subparagraph (b) of this Paragraph, the credit shall be allowed
3 against the income tax for the taxable period in which the credit is earned and the
4 franchise tax for the taxable period following the period in which the credit is earned.
5 The credits approved by the department shall be granted at the rate of twenty-five
6 percent of the amount of the investment with the credit divided in equal portions for
7 three two years.
8 * * *
9 G. Except as provided for in Paragraph (3) of this Subsection, applications
10 received on or after July 1, 2019, for investments that meet the requirements of
11 Subsection C of this Section and the requirements of 26 U.S.C. 1400Z-1, 1400Z-2,
12 and applicable federal regulations shall be entitled to an enhanced credit in
13 accordance with the provisions of this Subsection.
14 (1) The amount of the credit granted by the department shall be thirty-five
15 percent of the amount of the investment with the credit divided in equal portions for
16 two years.
17 (2) In addition to the credit cap provided for in Subsection D of this Section,
18 the total amount of credits granted under this Subsection shall not exceed three
19 million six hundred thousand dollars per year for a total program cap of seven
20 million two hundred thousand dollars per year. If the department does not grant the
21 entire three million six hundred thousand dollars in tax credits in any calendar year
22 authorized pursuant to this Subsection, the amount of unused tax credits shall carry
23 forward to subsequent calendar years and may be granted in any year without regard
24 to the three million six hundred thousand dollar per year cap provided for in this
25 Subsection.
26 (3) To the extent that federal laws and regulations relative to opportunity
27 zones require that business revenues be derived from within the opportunity zone,
28 otherwise eligible businesses shall be exempt from the requirement that fifty percent
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HB NO. 586
1 or more of sales must come from out of state as specified in Subsection C of this
2 Section.
3 H. No credits shall be granted or reserved under this program for reservation
4 applications received by the department on or after July 1, 2021 July 1, 2025.
5 Section 2. This Act shall become effective upon signature by the governor or, if not
6signed by the governor, upon expiration of the time for bills to become law without signature
7by the governor, as provided by Article III, Section 18 of the Constitution of Louisiana. If
8vetoed by the governor and subsequently approved by the legislature, this Act shall become
9effective on the day following such approval.
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 586 Engrossed 2019 Regular Session Jimmy Harris
Abstract: Authorizes an enhanced Angel Investor tax credit for investments made in
Louisiana Entrepreneurial Businesses located in federally established opportunity
zones and authorizes the pay out of the credit to the taxpayer in divided portions over
two years.
Present law establishes the Angel Investor Tax Credit program which authorizes a 25%
income or corporate franchise tax credit on investments in Louisiana small businesses that
are certified by Louisiana Economic Development as "Louisiana Entrepreneurial
Businesses."
Present law limits the total amount of credits granted under the program to $3.6 million per
year but authorizes the department to carry forward residual unused credits in any calendar
year to subsequent calendar years without regard to the annual credit cap.
Present law provides that the amount of the tax credit shall be based on the amount of
money invested in the La. Entrepreneurial Business, which shall not exceed $720,000 per
year per business and $1,440,000 total per business. The credits approved by the department
shall be granted at the rate of 25% of the amount of the investment with the credit divided
in equal portions for three years.
Proposed law retains present law but changes the granting of the credit from 25% of the
amount of the investment with the credit divided in equal portions for three years to 25% of
the amount of the investment with the credit divided in equal portions for two years.
Proposed law retains present law and authorizes an enhanced tax credit equal to 35% of the
amount of the investment made in Louisiana Entrepreneurial Businesses located in federally
established opportunity zones. The credit shall be divided into equal portions over two years.
Proposed law establishes a cap of $3.6 million per calendar year for the enhanced tax credit
which is in addition to the $3.6 million per year cap on Angel Investor tax credits thereby
establishing a total program cap of $7.2 million per calendar year.
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HB NO. 586
Present law prohibits credits from being granted or reserved under the program for
applications received on or after July 1, 2021.
Proposed law extends the sunset of the program from July 1, 2021, to July 1, 2025.
Effective upon signature of governor or lapse of time for gubernatorial action.
(Amends R.S. 47:6020(D)(2)(a) and (G); Adds R.S. 47:6020(H))
Summary of Amendments Adopted by House
The Committee Amendments Proposed by House Committee on Ways and Means to the
original bill:
1. Change the number of years the enhanced credit granted pursuant to proposed
law can be paid to the taxpayer from equal portions over three years to equal
portions for two years.
2. Change the number of years the credit provided for in present law for
investments in La. Entrepreneurial Business can be paid to the taxpayer from
25% of the amount of the investment with the credit divided in equal portions
over three years to equal portions for two years.
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