Extends the sunset of the research and development tax credit. (Item #19) (1/1/21) (EN -$1,000,000 GF RV See Note)
Impact
If enacted, the bill will have a significant impact on the state's tax policy, providing longer-term support for businesses engaged in research and development. The extension of the tax credit eligibility is expected to stimulate growth in innovation-driven industries, thereby contributing to economic development and job creation in Louisiana. By easing the constraints on the time frame for claiming these credits, the bill aims to foster a more favorable business environment that encourages sustained investment in R&D activities.
Summary
Senate Bill 4 (SB4) proposes an amendment to Louisiana's research and development tax credit, specifically extending the eligibility duration for the tax credit beyond its original sunset date. The amendment seeks to allow businesses more time to claim tax credits on eligible research expenditures incurred, thereby incentivizing investment in research and development activities within the state. The bill's intent is to enhance Louisiana's appeal as a location for businesses focused on innovative development, particularly in sectors that require substantial investment in research.
Sentiment
Overall, the sentiment surrounding SB4 is predominantly positive, as it is viewed as a pro-business measure that supports innovation. Legislators from various parties expressed support during discussions, recognizing the importance of maintaining a competitive edge in attracting businesses that prioritize research initiatives. There is a general consensus that enhancing tax incentives for R&D can lead to long-term benefits for the state's economy; however, some concerns were raised regarding the implications for the state's budget as extended tax credits could impact potential revenue.
Contention
While the bill received broad bipartisan support, some points of contention arose concerning the potential risk of budgetary strains due to the extended tax credits. Critics argue that extending tax breaks without adequate funding mechanisms could hinder the state’s ability to fund essential services. Despite these concerns, proponents maintain that the economic benefits stemming from increased business investment in R&D will outweigh the costs, emphasizing that innovation is crucial for the state's future economic competitiveness.
Extends the research and development tax credit program from Dec. 31, 2013, to Dec. 31, 2019, and changes the refundable tax credit to a tax rebate (RE INCREASE GF RV See Note)
Exempts certain research and development tax credit recipients from detailed examinations by the Department of Economic Development (EN SEE FISC NOTE GF EX See Note)
Provides relative to the amount of the research and development tax credit and authorizes transferability of the credit under certain circumstances (EN +$300,000 GF RV See Note)
Establishes termination dates for certain tax credits and incentive programs administered by the Department of Economic Development. (gov sig) (EN INCREASE GF RV See Note)
Limits annual expenditures on certain tax credit and rebate programs and terminates the programs in 2025. (Item #21) (gov sig) (EG +$588,000 GF EX See Note)
Provides for eligibility for the Angel Investor Tax Credit for investments made in federal opportunity zones. (Item #19) (gov sig) (EN DECREASE GF RV See Note)