Louisiana House Bill HB131

Louisiana 2021 Regular Session

• Introduced: 3/16/21
• Refer: 3/17/21
• Refer: 4/12/21
• Report Pass: 5/3/21

Caption

Establishes an income tax credit for donations of property used for research or direct education of students to certain educational institutions (EG -$2,120,000 GF RV See Note)

Impact

If enacted, HB 131 would significantly impact state tax laws by incentivizing donations of technological property to educational institutions. It outlines specific definitions and criteria for qualifying properties, ensuring that contributions are directed towards enhancing educational resources. By providing a structured tax credit for these contributions, the bill is poised to promote a more collaborative environment between the educational and business sectors, potentially leading to improved educational outcomes through access to better technology. However, the credit cannot exceed the taxpayer's total tax liability for the year, meaning that while it offers direct financial support to institutions, it may not lead to significant tax reductions for larger corporations.

Summary

House Bill 131 aims to establish an income tax credit for taxpayers who contribute, donate, or sell below-cost tangible movable property to educational institutions in Louisiana. The bill specifies an income tax credit equal to 29% of the cost or appraised value of the property involved in the transactions. This credit applies to property used for research, research training, or direct education purposes at institutions such as schools, colleges, and libraries. The goal of this legislation is to encourage private sector support for educational institutions by alleviating some of the financial burden of acquiring state-of-the-art technology and equipment necessary for modern education practices.

Sentiment

The sentiment surrounding HB 131 appears to be positive among proponents who argue that such a measure is essential for enhancing educational resources in Louisiana. Supporters highlight the importance of technological advancements in education and view this bill as a means to engage the business community in contributing to local schools and institutions. Nevertheless, there could be concerns among some legislators regarding the long-term impacts of creating financial incentives linked to property donations, particularly on the local tax base and state revenues. The provision allowing the Department of Revenue to promulgate rules might also raise questions about how effectively these credits could be implemented and monitored.

Contention

Notable points of contention around HB 131 include the limitations placed on the credit, set to expire after January 1, 2027, which may restrict the long-term viability of this funding mechanism. Additionally, the requirement that only donations approved by the educational institution's board qualify for the credit could present hurdles for taxpayers, potentially leading to disparities in how institutions are able to utilize the incentive. Moreover, there is an ongoing debate on whether such tax credits adequately address the broader funding issues faced by educational institutions or merely offer a temporary solution that may not result in sustained educational improvements.