Louisiana House Bill HB173

Louisiana 2021 Regular Session

• Introduced: 3/23/21
• Refer: 3/23/21
• Refer: 4/12/21

Caption

Establishes a corporate income tax credit for certain broker-dealer financial businesses (OR DECREASE GF RV See Note)

Impact

The bill proposes strict requirements to qualify for the tax credit, such as being regulated by the Financial Industry Regulatory Authority (FINRA), managing assets exceeding $500 million, and employing at least 200 staff with an average salary above $50,000. These conditions are designed to ensure that only substantial and stable financial firms benefit from the credit, which could potentially stimulate job growth and foster economic resilience within the designated districts.

Summary

House Bill 173 establishes a corporate income tax credit aimed at broker-dealer financial firms that either set up a new home office or relocate their headquarters to downtown development or cultural districts within Louisiana. This initiative seeks to incentivize the establishment of financial entities in areas designated for economic growth, thereby enhancing the state's fiscal landscape and urban revitalization. The credit is set at 50% of the firm's corporate income tax liability for the following tax year, rewarding significant business investments.

Sentiment

The sentiment around HB 173 appears generally positive among proponents, primarily focused on economic development and the prospect of attracting high-value financial operations to Louisiana. Supporters argue it will create jobs and increase local economic activity, particularly in urban centers that may be struggling financially. However, there may be underlying concerns regarding the fairness of tax incentives for large firms while potentially neglecting smaller businesses or other sectors that could also benefit from similar support.

Contention

Notable points of contention include discussions on the long-term viability of such tax credits, and if this could lead to a reduction in state revenue, particularly after 2032, when no new credits will be granted under this scheme. Additionally, critics may argue that the focus should be on enhancing support for local businesses rather than offering substantial incentives to attract outside corporations. This could spark debates around prioritizing fiscal resources and ensuring equitable economic opportunities across different business sectors.