HLS 21RS-128 ORIGINAL
2021 Regular Session
HOUSE BILL NO. 173
BY REPRESENTATIVE ECHOLS
TAX/INCOME-INDIV/EXEMPT: Establishes a corporate income tax credit for certain
broker-dealer financial businesses
1 AN ACT
2To enact R.S. 47:6042, relative to income tax; to establish a corporate income tax credit for
3 certain broker-dealer businesses; to provide for the amount of the credit; to provide
4 for requirements and limitations; to authorize the recapture of credits under certain
5 circumstances; to authorize the assessment and collection of interest under certain
6 circumstances; to provide for the termination of the credit; to provide for
7 applicability; to provide for an effective date; and to provide for related matters.
8Be it enacted by the Legislature of Louisiana:
9 Section 1. R.S. 47:6042 is hereby enacted to read as follows:
10 ยง6042. Tax credit; broker-dealer financial businesses relocating to Louisiana
11 A.(1) There shall be allowed a credit against corporate income tax for a
12 broker-dealer financial firm in the business of buying and selling securities on its
13 behalf or on behalf of customers, hereinafter "broker-dealer", that establishes for the
14 first time or relocates a home office or headquarters in a downtown development or
15 cultural district in Louisiana. The amount of the credit shall equal fifty percent of
16 the broker-dealer's corporate income tax liability, and the credit shall be applied
17 against the taxpayer's liability for the subsequent tax year.
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HB NO. 173
1 (2) In order to qualify for the credit authorized pursuant to this Section, the
2 broker-dealer shall meet all of the following requirements:
3 (a) The broker-dealer shall be subject to regulation by the Financial Industry
4 Regulatory Authority.
5 (b) The broker-dealer shall manage assets that exceed five hundred million
6 dollars at the time of applying for the credit and for each year the broker-dealer
7 claims the credit.
8 (c) The broker-dealer shall employ more than two hundred employees at its
9 home office or headquarters who have an average annual wage of at least fifty
10 thousand dollars exclusive of health insurance premium payments or contributions,
11 pension or retirement contributions, and other benefits.
12 B.(1) The taxpayer applying for the credit authorized pursuant to this Section
13 shall submit an application to the secretary of the Department of Economic
14 Development. After the secretary reviews the application and certifies that the
15 applicant meets all of the requirements of Subsection A of this Section, the secretary
16 shall execute a contract with the applicant for a period of up to five years providing
17 for the terms and conditions for participation in the tax credit program established
18 pursuant to this Section which shall include an annual attestation from the taxpayer
19 that all qualifications for participation in the program continue to be met. The
20 secretary shall review the contract annually to ensure that the applicant continues to
21 meet the requirements for participation in the program.
22 (2) The secretary of the Department of Economic Development shall notify
23 the secretary of the Department of Revenue in writing within thirty days of executing
24 a contract for the granting of tax credits pursuant to this Section. If after review of
25 the annual contract, the secretary of the Department of Economic Development
26 determines that the applicant no longer qualifies for the tax credit, the secretary of
27 the Department of Economic Development shall notify the secretary of the
28 Department of Revenue in writing within thirty days of the determination.
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HB NO. 173
1 C. Tax credits granted pursuant to the provisions of this Section but later
2 disallowed in whole or in part may be recovered by the secretary of the Department
3 of Revenue from the taxpayer applicant through any collection remedy authorized
4 by R.S. 47:1561 that is initiated within three years from December thirty-first of the
5 year in which the credit was originally granted. The only interest that may be
6 assessed and collected on recovered credits is interest at the rate of three percentage
7 points above the rate provided for in R.S. 9:3500(B)(1) which shall be computed
8 from the original due date of the return on which the disallowed credit was taken.
9 D. No credits shall be granted pursuant to this Section nor may the secretary
10 of the Department of Economic Development enter into any new contract with an
11 applicant on or after January 1, 2032.
12 Section 2. The provisions of this Act shall be applicable to contracts entered into on
13or after January 1, 2022, and shall be applicable for tax years beginning on or after January
141, 2022.
15 Section 3. This Act shall become effective on January 1, 2022.
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 173 Original 2021 Regular Session Echols
Abstract: Establishes a corporate income tax credit equal to 50% of tax liability for broker-
dealer financial firms who establish for the first time or relocate a home office or
headquarters in a downtown development or cultural district in Louisiana.
Proposed law establishes a corporate income tax credit for a broker-dealer financial firm in
the business of buying and selling securities on its behalf or on behalf of customers,
hereinafter "broker-dealer", that establishes for the first time or relocates a home office or
headquarters in a downtown development or cultural district in La. The amount of the credit
shall equal 50% of the broker-dealer's corporate income tax liability, and the credit shall be
applied against the taxpayer's liability for the subsequent tax year.
Proposed law requires a broker-dealer to meet all of the following requirements in order to
qualify for the credit:
(1)Be subject to regulation by the Financial Industry Regulatory Authority.
(2)Manage assets that exceed $500M dollars at the time of applying for the credit and
for each year the broker-dealer claims the credit.
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(3)Employ more than 200 employees at its home office or headquarters who have an
average annual wage of at least $50,000 exclusive of health insurance premium
payments, pension or retirement contributions, and other benefits.
Proposed law requires the taxpayer to submit an application to the secretary of the Dept. of
Economic Development (DED). After the secretary certifies that the applicant meets all of
the requirements of proposed law, the secretary shall execute a contract with the applicant
for a period of up to five years providing for the terms and conditions for participation in this
tax credit program which shall include an annual attestation that the taxpayer continues to
meet all qualifications for participation in the program. Further requires an annual review
of the contract to ensure that the applicant continues to meet the requirements for
participation in the program.
Proposed law requires the secretary of the Dept. of Revenue (DOR) to be notified in writing
within 30 days of execution of a contract for the granting of tax credits. If the secretary of
DED determines that an applicant no longer qualifies for the tax credit, the secretary of DED
shall notify the secretary of DOR in writing within 30 days of the determination.
Proposed law provides for the recovery of disallowed credits and authorizes the assessment
and collection of interest at the rate of 3% above the rate provided for in present law to be
computed from the original due date of the return on which the disallowed credit was taken.
Proposed law prohibits credits from being granted and the secretary of DED from entering
into any new contract with an applicant on or after Jan. 1, 2032.
Proposed law applicable to contracts entered into on or after Jan. 1, 2022, and shall be
applicable for tax years beginning on or after Jan. 1, 2022.
Effective Jan. 1, 2022.
(Adds R.S. 47:6042)
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