GREEN SHEET REDIGEST
HB 678 2021 Regular Session Duplessis
TAX CREDITS: Provides for the Louisiana work opportunity tax credit
DIGEST
Proposed law authorizes an income tax credit for eligible businesses that hire participants in
work release programs provided for in present law (R.S. 15:711, 1111, 1199.9, and 1199.10).
Proposed law defines "eligible business" as any business that is subject to La. income tax and
participates in any of the work release programs provided for in present law.
Proposed law defines "eligible re-entrant" as an inmate eligible for participation in a work
release program provided for in present law.
Proposed law defines "eligible job" as:
(1)A new job.
(2)An existing job that has been vacant for at least one year.
(3)An existing job that is vacant because the person who previously filled the job left
voluntarily or was terminated for cause.
Proposed law defines "secretary" as the secretary of the Dept. of Revenue.
Proposed law provides the credit is earned upon certification that the re-entrant has been
employed by the eligible business in an eligible job for 12 consecutive months. Further
provides that the credit may be earned only once for each eligible re-entrant.
Proposed law provides that the amount of the credit shall equal 5% of the total wages paid
to the eligible re-entrant for employment in an eligible job during the specified time period.
Further provides the total amount of tax credits granted to an eligible business shall not
exceed $2,500 per eligible re-entrant.
Proposed law provides the credit shall be earned upon certification by the Dept. of Public
Safety or the applicable sheriff to the Dept. of Revenue that the eligible business employed
an eligible re-entrant in an eligible job for 12 consecutive months following the re-entrant's
release from imprisonment.
Proposed law provides that the credit shall be allowed against any La. income or franchise
tax due by the business for the taxable period in which the credit is earned.
Proposed law authorizes businesses to carry forward any unused credit for a period not to
exceed five years.
Proposed law authorizes the secretary to recover the credit under certain circumstances.
Proposed law permits the Dept. of Revenue to promulgate rules to establish procedures
related to program eligibility.
Proposed law provides no credit shall be granted after June 30, 2027.
Proposed law is applicable to tax years beginning on or after Jan. 1, 2021.
Present law (R.S. 47:297.8) provides for an earned income tax credit against individual
income tax in an amount equal to 5% of the federal earned income tax credit for tax years
beginning on and after January 1, 2019 through December 31, 2025.
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Prepared by Curry J. Lann. Proposed law removes the sunset date for the 5% earned income tax credit.
Proposed law increases the earned income tax credit to equal 50% of the federal earned
income tax credit for one year beginning January 1, 2021.
Proposed law applies the one year increase of the earned income tax credit for individual
taxpayers who do not have a qualifying child and who are either:
(1)At least eighteen years of age but less than twenty-five years of age.
(2)At least sixty years of age.
Effective upon signature by the governor or lapse of time for gubernatorial action.
(Adds R.S. 47:287.750)
Summary of Amendments Adopted by House
The Committee Amendments Proposed by House Committee on Ways and Means
to the original bill:
1. Add a definition for the term "secretary".
2. Change the amount of the credit from 50% of the eligible re-entrant wages to
5% of the eligible re-entrant wages.
3. Change the maximum amount of the credit from a total of $20,000 per
eligible business in a calendar year to a total of $2,500 per business per
eligible re-entrant.
4. Add provisions requiring the Dept. of Public Safety or the sheriff, whichever
is applicable, to certify to the Dept. of Revenue that the eligible business
employed an eligible re-entrant in an eligible job for at least 12 consecutive
months following their release from imprisonment.
5. Add provisions that permit the secretary of the Dept. of Revenue to recover
a credit if the credit later becomes disallowed.
6. Add provisions prohibiting a taxpayer from receiving any other tax incentive
for the job creation or hiring of an eligible re-entrant for which the taxpayer
has received a tax credit pursuant to proposed law.
7. Authorize the Dept. of Revenue to promulgate rules in accordance with the
Administrative Procedure Act to establish procedures related to program
eligibility.
8. Add provisions prohibiting the granting of credits after June 30, 2027.
9. Change the effectiveness of proposed law from Jan. 1, 2022, to effectiveness
upon signature by the governor or lapse of time for gubernatorial action.
10.Make technical changes.
Summary of Amendments Adopted by Senate
Committee Amendments Proposed by Senate Committee on Revenue and Fiscal
Affairs to the engrossed bill
1. Adds provisions that make the current 5% earned income tax credit
permanent.
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Prepared by Curry J. Lann. 2. Provides for a one-year increase in the earned income tax credit for certain
taxpayers.
3. Makes technical changes.
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Prepared by Curry J. Lann.